VC based assets and securities and asset transfers

ESMA Call for Evidence on Investments Using Virtual Currency or Distributed Ledger Technology

On April 22, 2015, the European Securities and Markets Authority (ESMA) published a call for evidence on investments using virtual currency (vc) or distributed ledger technology.

ESMA has been monitoring and analyzing VC investment over the last six months to understand developments in the market, potential benefits or risks for investors, market integrity or financial stability, and to support functioning of the EU single market. ESMA is sharing its analysis to promote wider understanding of innovative market developments. It requests feedback and any additional information on the following:

  1. VC products. For example, collective investment schemes or derivatives such as options and contracts for difference that have VC as an underlying or invest in VC related businesses and infrastructure. Annex II to the paper provides an overview of VC investment products identified by ESMA.
  2. VC based assets and securities and asset transfers. For example, financial assets such as shares and funds that are exclusively traded using VC distributed block chains (also known as block chains).
  3. The application of the distributed ledger technology to securities and investments, whether inside or outside a VC environment.

The consultation closes on July 21, 2015.

ESMA intends to monitor the evolution of investments using VC or distributed ledger technology to ensure that regulators are aware of significant market developments. Subject to assessing the responses received to the call for evidence, it has no immediate plans to take any regulatory action.