The European Banking Authority (EBA) is proposing testing to see if tensions in non-bank financial institutions (NBFIs), including cryptocurrency-related entities, will impact lenders.
According to the Financial Times, EBA chairman José Manuel Campa expressed concern about the need to “deepen the links between banks and other financial firms.”
“We should be doing more, and we will be doing more. We need to have an understanding of the whole underlying chain in NBFIs.”
José Manuel Campa, EBA chairman
The EBA has already taken some action to address the role that cryptocurrency could play in stressing the system. Last November, the regulator published draft rules on liquidity and capital requirements for stablecoin issuers under the EU’s new Markets in Crypto-Assets (MiCA) regulation.
The EBA has also proposed rules requiring individuals with a stake of more than 10% in a crypto company to be screened for convictions or sanctions and directing crypto companies to monitor customers using privacy coins or self-hosted wallets to identify potential money laundering.
The EBA’s latest initiatives are directly linked to the adoption of MiCA last spring. 27 EU member countries unanimously supported the bill. The document introduces institutional regulation of the issuance of cryptocurrencies and establishes a uniform legal regime for cryptocompanies in the European Union. The EU began work on a package of regulatory acts back in 2020. The law will officially come into force 20 days after publication, but the rules for cryptocurrency exchange will only begin to apply in December 2024.