EU banking regulator to investigate links between banks and cryptocurrency entities
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The European Banking Authority (EBA) has proposed tests to see whether tensions with non-bank financial institutions (NBFIs), including cryptocurrency-related entities, affect lenders.
according to Financial TimesEBA President José Manuel Campa expressed concern about the need to “deepen the links between banks and other financial companies”.
“We should do more, and we will do more. We need to understand the entire underlying chain of non-bank financial institutions.”
José Manuel Campa, President of EBA
The EBA has already taken some actions to address the pressure that cryptocurrencies can put on the system. In November last year, the regulator published draft rules on liquidity and capital requirements for stablecoin issuers under the EU’s new Markets in Crypto-Assets (MiCA) regulation.
The EBA also proposed rules that would require criminalization or sanction screening of individuals holding more than 10% of shares in cryptocurrency companies, and direct cryptocurrency companies to monitor customers using privacy coins or self-hosted wallets to identify potential money laundering.
The EBA’s latest initiative is directly related to the adoption of MiCA last spring. 27 EU member states unanimously supported the bill. The document introduces the institutional regulation of cryptocurrency issuance and establishes a unified legal system for crypto companies in the EU. The EU began formulating a regulatory package as early as 2020. The law will officially come into effect 20 days after publication, but cryptocurrency trading rules will not apply until December 2024.
