Regulatory framework

DCGG’s mission is to ensure that any and all digital asset-related regulations or policies support rather than stifle technology, innovation and growth. We strongly believe that by welcoming the digital assets ecosystem in the EU, the subsequent innovation and increased competition will present opportunities and benefits for EU businesses, consumers and the broader financial system.

DCGG supports the EU’s Digital Finance Strategy and the accompanying legislative proposals that seek to ensure a robust EU financial sector, which services to modernise the European economy and give consumers access to innovative financial products, while ensuring consumer protection and financial stability.

DCGG advocates that any policy or regulatory framework should ensure:

Future-proof regulatory environment:

Any regulatory framework should be technology-neutral to ensure that the legislation is future-proof. This allows for innovation to occur in the market while ensuring safety and security for consumers. Well-developed and future-proof regulation for the next wave of innovations could make the EU the most prosperous and advanced digital economy, which is vital for the digital asset industry, consumers and economy. In essence, it would welcome innovation in Europe while regulating the market, providing customer protection and incentivizing crypto asset businesses to comply with clear and effective regulation.

Harmonised supervision and single rulebooks:

DCGG favours a single supervisory approach harmonised at the EU level. A harmonised regulatory framework ensures that there is no regulatory gold-plating at the national level and allows companies to easily scale-up and provide services across borders. Digital-native markets, such as those of digital assets, are cross-border in their nature, thus a harmonised regime is essential.

High level of consumer protection:

EU citizens should enjoy a high level of consumer protection from unfair, deceptive and fraudulent business practices. At the same time, consumer education is indispensable to ensure good consumer outcomes, as opposed to an overload of information due to legislation.

Regulatory clarity:

DCGG Members welcome the ability to protect their customers without regulatory ambiguity or divergence across the EU Member States. With regulatory certainty guaranteed, digital asset businesses have a clear framework of what is expected of them, thus benefiting the EU marketplace and safeguarding consumer protection.

High data protection and security standards:

Ensuring the highest data protection standards for consumers is vital. DCGG advocates for innovative and advanced cryptographic technologies, such as Zero-Knowledge Proof (ZKP). ZKP facilitates high AML/CFT and KYC standards and compliance objectives while complying with GDPR and reducing the possibility of data leakage or hacking. Furthermore, it can help to ensure resilience and security against cyberattacks or similar threats. DCGG advocates for principle-based and technology-neutral regulation based on incentives rather than penalties to encourage the industry to develop new and efficient ways to reduce security risks.

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