CMU, AML and stablecoins: Council outlines way ahead

ABBL Published 06.12.2019

On 5 December, EU finance ministers gathered in Brussels to join one of the densest meetings of the year. The agenda comprised several topics, ranging from the Banking Union to stablecoins, anti-money laundering and Capital Markets Union, as well as sustainable finance. The discussion proved lively at times and the Council agreed on conclusions on quite a number of topics.

Firstly, the Council adopted conclusions on the deepening of the Capital Markets Union setting out main objectives. Among these, to enhance the access to finance for SMEs; the removal of structural and legal barriers for increased cross border capital flows; to provide incentives and remove obstacles for well-informed retail savers to invest. On this issue, Member States broadly agreed, and the Council invited the Commission to advance possible measures and actions that could help to establish the objectives in practice and complete the 2015  Action Plan by what is now commonly referred to in Brussels as CMU 2.0. Both the Council and the Commission are committed to complete the CMU as soon as possible.

Moving on to anti-money laundering, the Council adopted conclusions on strategic priorities for combating money-laundering and countering terrorism financing, as a direct response to the EU strategic agenda for 2019-2024. In this area, the Council invited the Commission to address some aspects of the fifth AML Directive through a Regulation, in order to guarantee a better harmonization of national legislations. Also, the discussion focused on the Commission proposal to likely set up an EU supervisory body with direct powers on AML/CTF. Member States were divided on this, worrying about the competences to confer to the said body and the possible clashes with national supervisory authorities. Many demanded the Commission to effectively assess the need of such an authority and to consider the implementation of the Directive – whose transposition deadline is set for January 2020 – before going forward.

On the techno-political issue of stablecoins, the Council and the European Commission adopted a joint statement, committing to develop a legislative framework for these crypto-assets that would address the digital transformation affecting the financial sector. The statement mentioned the opportunities and risks that stablecoin initiatives could likely bring onto the EU financial markets. This mainly because of the lack of adequate information, which in turn does not allow to assess whether the existing legal framework applies to such novelties. For this reason, “there is a need to ensure legal clarity about the status of stablecoin arrangements”, consistent with the global response. Indeed, the Council and the Commission are committed to ensure appropriate standards of consumer protection and orderly financial conditions, as well as promoting innovation of payment arrangements.

In conclusion, the Council reiterated its commitment to fight climate change by facilitating the channeling of private capital towards climate friendly investments. In this regard, finance ministers approved a work plan on climate change, including sustainable finance, green budgeting, green taxation and carbon pricing.

By the EU Representative Office in Brussels

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