The inconsistency of Belgium’s cryptocurrency policy has unfortunate consequences
The Scientific and Technical Advisory Committee (STAC) released a resolution on cryptocurrency legislation in Belgium in mid-January. The policy outcomes of the February 2 plenary session were dismal. Florian Ernotte, an Avroy lawyer, HEC-Liège researcher, and co-founder of cryptomonnaie.be, believes the drafters failed to listen to investors and are biased against cryptocurrencies.
The current situation with crypto legislation in Belgium
Since such cryptos as Bitcoin and Ethereum have no issuer and lack the characteristics of securities, they should not be subject to financial regulations. On November 25, the Belgian Financial Services and Markets Authority (FSMA) confirmed that cryptocurrencies are not securities.
The agency intends to eliminate the most prevalent gray areas, such as the classification of cryptocurrencies as securities. Representatives from the European Green Party and the Socialists have also advocated that EU AML legislation be extended to the DeFi industry, including NFT platforms.
Context. Those who want to learn more read the 146-page report summarizing the hearings rather than the 8-page legislative proposal.
Belgium improves cryptocurrency supervision
Indeed, the Belgian government has taken some steps to address the crypto issue, such as requiring cryptocurrency exchanges to register with the Financial Services and Markets Authority (FSMA). Nonetheless, there is still a lack of clarity and consistency in Belgian policy towards cryptocurrencies, which can create legal uncertainty and risk for businesses and individuals operating in the sector.
Previously, Belgium restricted the conditions for cryptocurrency exchange platforms’ operation. In turn, it demands a special license in FSMA. The regulation explains the procedure for getting a crypto license in Belgium for anyone intending to begin or maintain their operations in the country. Following this, companies should pay particular attention to the criteria since registration is required under Belgian AML rules.
Operating cryptocurrencies that do not apply for registration by September 1, 2022, may face substantial fines. Read more about the new policy by following the link to our article.
How does this policy relate to the digital euro?
According to Florian Ernott, the lack of clarity and consistency in Belgian policy toward cryptocurrencies might have a detrimental impact on the development and implementation of innovative digital payment systems, such as the digital euro. Furthermore, conflicting and ambiguous legislation can cause legal uncertainty and danger for businesses and individuals. As a result, they are less likely to invest in and use innovative digital payment systems.
In conclusion, crypto regulation should be updated over time so that it does not undermine other areas of the country’s financial system. It should also encourage rather than impede the development of future blockchain-based digital projects, such as the digital euro.