Belgium to Adopt Temporary Cryptocurrency Law Until EU’s MiCA Comes into Force

Bitcoin (BTC), Ethereum (ETH) and other cryptocurrencies issued only by computer code are not considered securities under the Belgian financial watchdog.

The rationale was provided in a report published by Belgium’s Financial Services and Markets Authority (FSMA) on 22 November, a version of which was put up for public consultation in July 2022.

According to the FSMA, clarification has been provided following a surge in inquiries about how current financial laws and regulations in Belgium relate to Crypto assets. The FSMA said that under its “step-by-step plan,” cryptocurrencies would be classified as securities if they were issued by individuals or companies, even though this is not legally binding under Belgian or EU legislation.

“If there is no issuer, for example in the case where the instrument is created by computer code, which is not done in the execution of an agreement between the issuer and the investor (e.g. bitcoin or ether), then in principle the prospectus regulation, Prospectus laws and MiFID rules of conduct do not apply.”

The FSMA also mentioned that its step-by-step approach is technology-neutral, meaning that it does not matter whether a Crypto asset exists and is enabled on a blockchain or through other conventional means.

First prepared by the FSMA in July 2022, the report aims to answer frequently asked questions from Belgium-based Crypto asset issuers, issuers and service providers.

The European Parliament’s Regulation of Markets in Cryptocurrency Assets (MiCA) is expected to be adopted and come into force in early 2024, but the FSMA noted that a step-by-step plan will serve as a guide until then.

Even cryptocurrencies not classified as securities may be subject to other laws if businesses use them as a form of payment, the Belgian regulator stressed.

“However, if the instruments have a payment or exchange function, additional regulations may apply to the instruments or persons providing certain services in connection with those instruments.”

Belgium’s straightforward regulation stands in stark contrast to the “regulation by law” strategy used by the U.S. Securities and Exchange Commission (SEC), which is currently battling with the U.S. Commodity Futures Trading Commission (CFTC) over regulation of Crypto assets (CFTC) Control.

SEC Chairman Gary Gensler has long viewed bitcoin as a commodity, but he recently said that a combined ethereum and other pledged currencies would qualify as securities under the Howey test.

Source of information: compiled from TODAYQ by 0x information.The copyright belongs to the author Om Labde, and shall not be reproduced without permission

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