What would be the effect of requiring ICOs to have a passport to the EU in order to do business there?
Reportedly, a member of the European Parliament named Ashley Fox organized a meeting last Tuesday in order to speak with other lawmakers on the topic of ICO regulation.
The conclusions from this meeting were unique, to say the least.
What came out of it was a structured proposal that has been termed an ICO passport, which echoes a bit of the sentiment that BitLicense had. In the minds of the regulators, this “passport,” would streamline the process of running an ICO in the European Union as well as greatly minimize the instances of scams.
In the minds of average Crypto investors, it is easy to see this as a set of barriers which might stifle innovation.
Once you understand the specifics of Fox’s ICO passport, then it could be easier to understand where the truth of this proposal lies. According to a recent article by Coindesk on this subject, the key provisions include: limiting the funds that ICOs can raise to 8 million euros, making compliance with know-your-customer and anti-money laundering rules mandatory, and providing the ICOs involved with legally backed access to every member country in the European Union.
Fox attempted to elaborate on this by stating that all of this together would make every ICO completely transparent to the public and lawmakers as well as establish a regulatory framework for running ICOs that involve member countries.
What was perhaps even more interesting was that Fox seemed to suggest that his framework would not be mandatory, at least at first. In the Coindesk piece, he said that as time goes on, companies might essentially voluntarily sign up for the regulatory framework. In attempting to explain why this would happen, Fox claimed that because the framework will exist, no benefits will exist for ICOs that try to remain outside of it and do business inside of the EU.
In truth, however, his rationale for this was simply that as of now, every EU country has separate laws related to ICOs. Saying this, however, does not prove that his idea will be accepted as a blanket solution by the governments of every EU participant.
In the end, only time will tell whether this solution pushes ICOs out of the EU, or, on the other hand, encourages healthy innovation within the EU.
By: BGN Editorial Staff