ECB Supervision, McCaul: more international cooperation on crypto supervision is needed

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(Finance) – “I think it’s useful greater convergence and international cooperation in the regulation, in order to fill the potential gaps that characterize the crypto-asset supervision. Individual regulatory regimes based solely on national law may no longer be sufficient. He stated it Elizabeth McCaulmember of the Supervisory Board of the ECB, speaking at the conference “The New Frontiers of Digital Finance” organized by CONSOB.

“New developments in digital finance highlight the need for a more integrated global framework, in the absence of which regulatory arbitrage would increase the risk of losses for customers, even reaching threaten financial stability“, has explained.

McCaul explained that bank or market supervisors today face a challenge “even more pronounced as the digital transformation has blurred the boundaries‘, making it difficult to determine how to allocate supervisory activities to the appropriate regimes.

The official also stated that the collapse of FTP extension (which was a popular cryptocurrency exchange) last November “left us with questions about gaps in the framework“, also because many companies in the crypto world claim to have no headquarters, and therefore “the lack of a traditional central entry point poses challenges for our current regulatory and supervisory approaches”.

McCaul argued that Europe is at the forefront in the development of crypto regulation, citing the “MiCA” rules package, but alone it will not be able to fill all the potential gaps, “also because the same level of supervision does not exist in other major jurisdictions”.