Amaka Nwaokocha14 hours agoEuropean Banking Authority, ESMA issue crypto entity suitability guidelinesThe joint guidelines include granting authorization for asset-referenced tokens issuance and crypto asset service providers’ conducting prudential assessments before potential acquisitions.1721 Total views5 Total sharesListen to article 0:00NewsJoin us on social networksThe European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) jointly released a consultation paper on Oct. 20 featuring two drafts. These drafts encompass the assessment of the suitability of management body members and shareholders or members holding qualifying stakes in issuers of asset-referenced tokens (ARTs) and crypto asset service providers (CASPs).

The proposed joint guidelines for evaluating the suitability of shareholders or members, whether direct or indirect, holding qualifying stakes in ART or CASP issuers offer regulatory bodies a shared approach for assessing their suitability. This includes granting authorization for ART and CASP issuance and conducting prudential assessments for potential acquisitions.

However, the guidelines for assessing the suitability of management body members in ART and CASP issuer firms offer standardized criteria for evaluating their knowledge, expertise, integrity and ability to dedicate adequate time to fulfill their responsibilities.Screenshot of the consultation paper. Source: European Banking Authority

The guidelines seek to safeguard the integrity of and instill trust in the cryptocurrency market and its associated services and minimize the potential for rule application discrepancies and arbitrage, with the consultation period remaining open until Jan. 22, 2024.

Related: European Banking Authority calls for early adoption of stablecoin standards

Anticipating forthcoming regulations, the European Union’s banking regulator encouraged stablecoin issuers to voluntarily adhere to specific “guiding principles” related to risk management and consumer protection. The EBA unveiled its initial set of measures for public input on July 12, aiming to clarify the requirements of the Markets in Crypto-Assets regulation, which is set to be enforced on June 30, 2024.

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