The French Financial Markets Authority, or AMF, has recently proposed to have all of Europe adopt a regulatory sandbox. This sandbox is aimed to support the emerging industry for security tokens.
No Centralization Desired
This “Digital Lab” that the AMF proposed would run a course of three years, according to the AMF’s legal analysis they had done on the 6th of March. This would exempt certain projects from financial regulation, such as CSDR or the MiFID, which the AMF had concluded to be incompatible with the growth of the blockchain sector.
Robert Ophèle, the President of the AMF, explained that the frameworks in question were designed to frame a market infrastructure that is centralized. Through his speech, he explained that these projects thus aren’t suited to the ultimately decentralized nature that blockchain environments provide. Therefore, Ophèle believes many such projects will be rendered unprofitable with almost dead certainty.
Free Haven For Blockchain
However, Ophèle made it clear that he didn’t believe that Europe could simply adopt new regulations for both security tokens and blockchains overnight. He explained that Europe was facing a “chicken and egg” paradox, as the space needs documentation to develop new frameworks, but the current framework can’t let the space develop.
The Digital Lab sandbox is the proposed solution, according to Ophèle. It will allow regulators to gain both sides of the coin. Authorities will be capable of close monitoring of projects that evolve within this space, and at the same time, these projects can evolve without the limitation of traditional market regulations. From there, regulators will be capable of collecting three years’ worth of data and feedback in order to shape a new, flexible form of regulation.
A History Of Pro-Blockchain
Ophèle went further, explaining that a regulator needs to keep its applicable frameworks appropriate, thus understanding changes needed to be done to allow for this. He went further, stating that frameworks must make risk management possible in order to protect its users, but mustn’t lose the benefits that innovations bring to the table.
The AMF stands as one of the most pro-blockchain regulators within Europe, has consistently advocated a forward-thinking approach to it. It’s been pushing hard for positive approaches towards both distributed ledger and blockchain technology for several years now. The regulator had drafted blockchain bills, approved initial coin offerings, and even released experimental frameworks for firms to regulate themselves.
