Circle, a leading cryptocurrency company, has responded to the European Banking Authority (EBA) regarding its guidelines on cryptoassets. Circle has expressed its concerns and suggested revisions to the guidelines in order to foster innovation and provide clarity for the industry.
In its response, Circle highlights the need for a more balanced approach that recognizes the potential benefits of cryptocurrencies and blockchain technology. The company argues that the guidelines should not stifle innovation or hinder the growth of the digital asset industry.
Furthermore, Circle asserts that the EBA’s guidelines should provide clearer definitions for different types of cryptoassets, such as utility tokens, security tokens, and stablecoins. Clear classifications and guidelines will help businesses and regulators alike to understand the specific characteristics and risks associated with each type of cryptoasset.
Additionally, Circle proposes that the guidelines should take into account the existing regulatory frameworks in different jurisdictions, so as not to impede cross-border activities or create unnecessary obstacles for businesses.
By responding to the EBA’s guidelines, Circle aims to contribute to the ongoing discussion around the regulation of cryptoassets and promote a collaborative approach that benefits both businesses and consumers.
Overall, Circle’s response to the EBA seeks to foster an environment of responsible innovation and regulatory clarity, which will facilitate the continued growth and development of the cryptocurrency industry.
Title 1: EBA Guidelines on Money Laundering and Terror Financing: Circle’s Request for Clarity
Title 2: Circle Advocates for MiCA and Transfer of Funds Regulation in EBA Guidelines
The European Banking Authority (EBA) has recently released guidelines that aim to address the issues of Money Laundering (ML) and Terror Financing (TF). However, Circle, a prominent crypto venture, has expressed its concerns about the broad terminology used in these guidelines and has requested revisions for better clarity.
The increasing incidents of ML and TF activities in the crypto industry have put regulators worldwide on high alert. Instead of imposing restrictions on crypto platforms, regulators are focused on curbing illegal activities. However, Circle believes that there are certain shortcomings in the EBA guidelines.
Circle has highlighted that the guidelines use a broad terminology to cover all providers of technology and ancillary services in the crypto assets ecosystem. It argues that these guidelines fail to specify which firms are included and which firms are excluded. To address this issue, Circle recommends focusing on how the Markets in Crypto-Asset Regulation (MiCA) covers this category. MiCA already provides a definition for crypto ventures and refers to the Transfer of Funds Regulation. Ignoring these existing EU legislations would defeat their original purpose.
Furthermore, Circle emphasizes that entities under MiCA are not involved in ML and TF, according to their published response. These entities pose a limited risk of engaging in such activities on their platform. By including self-hosted wallets, which are essential for the functioning of crypto ventures, the EBA fails to realize their importance. Currently, platforms with integrated self-hosted wallets are designated as higher-risk entities. Circle suggests that this designation should be reconsidered to ensure uninterrupted service to their customers.
Another recommendation from Circle is to restrict the guidelines from extending to entities exempt from the regulatory scope of MiCA. These platforms should not be classified as higher risk since they have already been excluded from EU regulations, indicating that they do not require AML regulation or other aspects of regulation.
This is not the first time Circle has engaged with authorities to recommend modifications. Jeremy Allaire, Circle’s Chief Executive Officer, has previously testified before Congress, advocating for expanded regulatory clarification in the digital asset sphere. Circle has also responded to the Bank of England’s consultation paper on the digital pound, expressing support for well-regulated stablecoins issued privately, and highlighting ongoing research by the Bank of England on the Digital Pound.
Currently, the industry awaits EBA’s response to Circle’s recommendations. The outcome of this communication will have a significant impact on the regulatory landscape for crypto ventures and their operations in the European Union.