Excessive Regulation Could Constrain The Crypto Industry, Says EU Banking Authority Chairbr>
Andrea Enria, the chief executive of the European Banking Authority (EBA), said that he has “yet to be convinced” that cryptocurrencies should come under the full scope of regulation.
Speaking at the Copenhagen Business School on Friday, Enria said that bringing FinTech firms under the same supervisory umbrella as banks just because they compete in some of the same sectors is not the right answer.
“It would risk excessively constraining financial innovation, as the compliance burden placed on banks is not sustainable for small innovative startups,” Enria said.
He suggested that it would be more effective to prevent banks and other regulated financial institutions from holding or selling cryptocurrencies rather than regulating the digital assets themselves.
“This strategy would avoid granting any official recognition to a sector that is still very heterogeneous, changing fast, and, as such, difficult to regulate and supervise,” Enria said.
The EBA chairperson supports withholding the full force of regulatory measures from FinTech firms, so long as they do not perform the same functions of banks, providing credit, debit, and liquidity.
“We need to ensure that firms can enter and participate in the internal market for financial services on an equal footing and that a high standard of consumer protection is maintained,” Enria said.
Enria’s comments came after the EBA published its FinTech roadmap, which will ensure digital currency based services are regulated in a consistent way across the European Union.