European Central Bank lays foundation for crypto licensing

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The European Central Bank (ECB) has released a new statement mentioning the criteria it will be taking when harmonizing the licensing requirements for crypto and other digital assets in Europe.

According to the Wednesday statement, ECB believes that the national framework governing crypto assets diverge extensively. The Central Bank will also be applying the criteria from Capital Requirements Directive for licensing requests.

“In Germany, certain crypto activities are subject to a banking license requirement and to date, several banks have requested to be authorized to conduct these licensed activities. It is in this context that the ECB is taking steps to harmonize the assessment of licensing requests,” states the ECB.

With the new framework, the Central Bank looks to evaluate the risk profiles and risk capabilities of crypto firms. ECB will also be assessing business models, internal governance, and the firm’s ability to assess risk by appointing appropriate IT and risk experts.

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