The European Securities and Markets Authority (ESMA) launched a call for evidence last week on investments using digital currency – ESMA uses the term “virtual currency” – or distributed ledger technology.
ESMA is soliciting information and views from stakeholders on new developments in how digital currency technology is used to issue, buy and sell, and record ownership of securities. The authority would like to hear from everyone involved, whether from existing financial institutions, new startups or their technological advisors, and issuers and investors.
ESMA said it is interested in how different cryptocurrencies and the associated distributed ledger can be used in investments. The authority noted that there are now facilities available to use blockchain technology as a means of issuing, transacting in, and transferring ownership of securities in a manner that bypasses the traditional infrastructure for public offer and issuance of securities, trading venues such as exchanges and central securities depositaries or other typical means of recording ownership. The authority would like to learn more about these market developments, particularly to know to what extent the use of the blockchain could enter the financial mainstream and how it could be used.
ESMA is inviting market participants and other stakeholders to submit feedback and any additional information on the following topics:
- Digital currency investment products.
- Digital currency-based assets/securities and asset transfers that are exclusively traded using digital currency distributed ledgers.
- The application of the distributed ledger technology to securities/investments, whether inside or outside a digital currency environment.
The consultation will be open until July 21.