Crypto-asset regulation in the current international and European framework

Abstract

The growth of crypto-assets in recent years, their potential use as a means of exchange or saving, and their possible risks to financial stability, arising, among other things, from their interconnections with the banking sector, have drawn the attention of national and international authorities. In terms of the regulation of these assets, of note at the European level is the European Union’s proposal for a regulation on markets in crypto-assets, which establishes a regulatory framework for all those crypto-assets that currently lie outside the scope of the European Union’s existing regulation on financial services. As regards their treatment in the banking sector, in December 2022 the Basel Committee on Banking Supervision published the global standard on the prudential treatment of banks’exposures to crypto-assets. In this article we review the main characteristics of these two regulatory developments, which are essential for the future of the crypto-asset ecosystem’s relationship with the traditional financial world.