We are very pleased to have hosted and moderated one of several expert panels that took place as part of the Blockchain Revolution Global 2020. Our esteemed panelists provided valuable insights on the future for blockchain regulation in the European Union. Some of the key takeaways from the panel are set out below. 

Pēteris Zilgalvis, Head of Unit, Digital Innovation and Blockchain Digital Single Market, EU Commission:

• “Our approach is a pro innovative one without giving up on consumer and/or investor protection. We want to utilize the tools that we have at our disposal to work with the emerging technologies and the innovators to ensure that they can be implemented here in Europe […].”, said Peteris Zilgalvis in his opening statement.
• In response to the question, whether Facebook’s Libra was the sole trigger for the EU’s draft on the Markets in Crypto-Assets Regulation (MiCA) Peteris Zilgavis said, “Honestly, no […] but Facebook’s Libra did accelerate this process for providing legal clarity […] and was, perhaps, a little bit of wake-up call for people who are saying this is five or ten years in the future[…]”.

Greg Medcraft, Director of the Directorate for Financial and Enterprise Affairs of the OECD:

• Greg Medcraft replied “Look, consumer protection should not be a race to the bottom, […], it is actually a benefit for all if the consumer has trust and confidence [in the markets].”, when asked about whether MiCA could actually be a too burdensome regulation resulting in market players moving into less regulated jurisdictions.
• In relation to the regulatory development surrounding Facebook’s Libra, Greg Medcraft stated, “Regulators thought that these sort of things [stablecoins] are too small to care but then became too big to ignore.”.

Klaus Löber, Head of the Oversight Division, Directorate General Market Infrastructure and Payments, European Central Bank:

• “We have currently a particular interesting situation, where we have a combination of new technologies, new players and new services leveraging on these technologies, namely tokenization, platformication and [more …].” said Klaus Löber in his opening statement.
• “All global standard setters in all sectors have been looking intensively into financial innovation but the rise of stablecoins is the first instance where they all joined up and engaged in a cooperative effort to look at the implications […].”.

Alexander Höptner, CEO, Börse Stuttgart:

• Alexander Höptner started his opening statement by stating “In terms of tokenization, there is probably, at least, from my point of view, no better place to be than in the European Union at this point in time. I have rarely seen such a speed, push, drive and willingness to develop.”
• “We have now the unique opportunity to rebuild the global or at least European Market; what we should not do is to […] transport the old monopolies of the past to the monopolies of the future.” Höptner warned when speaking about the proposed MiCA framework.

Hagen Weiß, German Federal Ministry of Finance, Directorate Financial Market Policy: 

• On the question whether, in a distributed ledger environment, it is possible to review all offers and issuances coming from and/or targeting Germany from around the world, Hagen Weiss responded “Well, being perfectly honest, it certainly is not but that does not put you in a position, especially as a regulator, where you surrender.”
• Hagen Weiss further added that regulators “… should use all the principles that you have as regulator and […] legal elements that you have to try to prohibit […] fraudulent offers [coming from outside Germany/EU].”

Moderators: Dr. Michael Huertas, Partner and Co-Head of the Financial Institutions Regulatory Practice Group in Europe, and Valeria Hoffmann, Senior Associate focusing on capital markets, data protection and cryptocurrency issues, both from Dentons.

Panel editor: Dr. Clemens Maschke, Partner at Dentons and specialist in Emerging Markets and Venture Technology.

This event as a whole was organized by Blockchain Research Institute Europe (BRIE) as an independent responsible party within the meaning of the General Data Protection Regulation (GDPR).

For more information on Blockchain Revolution Global, please visit the website here, or contact Dr. Clemens Maschke who will direct you to appropriate points of contact at the Blockchain Research Institute Europe. 

Meet MiCA

This Background Briefing takes a deep dive into the EU's proposal for a Markets in Crypto-Assets Regulation. In addition to an overview of MiCA, the Briefing takes a closer look at the EU's Blockchain and distributed ledger technology market infrastructure with a view of helping businesses better understand and forward plan for the proposed changes.

The “Quick Take” Client Alert summarizes the most important changes in a quick and easy to digest format and readers are encouraged to consult the Background Briefing and its Appendix for a detailed analysis.

The Appendix shows what changes have been made to the substantive text in the most recent version of the MiCA Regulation proposal.

• Background Briefing - Download the full brochure
• Quick Take: Blockchain has been transformative and MiCA marks the Big Bang in regulation in the EU
• Appendix

Click here to find out more related thought leadership material.

Dentons Blockchain Capital Markets and Distributed Ledger Technology Capabilities 

The Dentons’ Capital Markets practice has been active from the beginning, when Blockchain and Distributed Ledger Technology in general first became a topic for discussion within the finance industry. Our team on the ground and cross-border specialists can offer a comprehensive in-depth analysis on Blockchain and DLT use cases and business processes in all relevant jurisdictions around the world. This not only includes understanding of the technological difference between Blockchain, Ethereum, IOTA etc. or the custody wallet technology, but also their programming capability and advanced IT skills, which enable our legal experts to understand the industry and projects, and provide corresponding and comprehensive advice. In particular, we actively support clients with the following workstreams: 

• Tokenization of existing securities; 
• Issuance and distribution of crypto-assets including, initial coin offerings (ICOs), securities token offerings (STOs) and token generating events (TGEs); 
• Crypto custody set-up and related regulatory matters; 
• Assistance with anti-money laundering and financial crime prevention frameworks; 
• Digital onboarding channel support, including in the context of digital ID and authentication systems; 
• Data protection and overall compliance with regard to the issuance and distribution of crypto assets and general set-up of business processes on DLT; 
• Taxation analysis and structuring; and 
• Intellectual property review and counseling surrounding blockchain technology advancements.