World Federation of Exchanges: EU blockchain rules should not disrupt financial order

Rage Comment : The World Federation of Exchanges (WFE) submitted a proposal to the European Securities and Markets Authority (ESMA), pointing out that EU blockchain regulation must ensure the core position of trusted, neutral third parties in a good market in order to achieve the benefits of blockchain. This proposal is in sharp contrast to the decentralization of blockchain. Previously, ESMA had also received proposals from multiple banks and financial institutions.

Translation: Annie_Xu

The World Federation of Exchanges (WFE) has submitted a document to the EU's main market regulator, proposing relevant recommendations on how to regulate blockchain applications.

Last year, the WFE began soliciting views from shareholders on the technology and submitted the document to the European Securities and Markets Authority (ESMA) last week.

The document mentions full support for ESMA’s entry into the field, noting that blockchain should not completely replace third parties in the market, an initiative that conflicts with the Bitcoin system, which does not have third parties.

WFE noted:

“We believe that while distributed ledger technology can bring important benefits, the risks must be carefully managed and that a trusted, neutral third party is at the heart of good markets.”

A recent WFE survey found that most internal member institutions are conducting blockchain testing, but the document noted that regulatory and legal issues still hinder the progress of technology and projects.

"The certainty of the legal identity of digital assets must be guaranteed in order to successfully transfer such assets, provide asset income protection, handle bankrupt corporate assets, and ensure the applicability of bankruptcy protection."

Last year, ESMA received documents from multiple market participants, including Italian banking group Intesa Sanpaolo. Members of the blockchain industry, including Coin Center, a nonprofit research and advocacy center for digital currencies, also joined in the discussion of relevant rulemaking.