BNY Mellon calls for Irish crypto rules

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Jonathan Keane

October 24 2021 02:30 AM

BNY Mellon urged the Department of Finance to introduce regulations for crypto assets while new EU rules are being developed.

The American bank recently set up a base for digital asset custodian services in Dublin for institutional clients investing into crypto assets.

BNY Mellon met Minister of State Seán Fleming in May to make the case for crypto asset regulations in Ireland. EU-wide rules are still being thrashed out on a European level.

“Whilst we acknowledge the Markets in Crypto Assets (MiCA) proposal by the European Commission seeks to create a separate regime for crypto assets at the European level, given the timeframe for such legislative action to come into effect, national regimes have quickly started to fill the gap within their respective national jurisdictions and we believe Ireland should follow suit,” BNY Mellon said in its briefing notes for the department.

The EU’s MiCA proposal aims to harmonise the regulation of crypto assets in the bloc by implementing safeguards around the custody of assets, capital requirements and greater protections for investors, including new rules around so-called stablecoins, cryptocurrency tokens that are pegged to fiat currencies.

According to the bank, it expects that it will be 2023 before any such EU-wide regulation would come into effect.

Several European countries have passed their own national laws in recent years. Germany’s Fund Location Act came into effect this summer and loosens up rules around how much certain institutional funds, or ‘spezialfonds’, can invest in crypto assets.

“Given the accelerating pace of change that is happening in other jurisdictions, and to meet evolving clients’ needs in relation to digital assets, we would welcome a clear and comprehensive strategy to create an attractive digital assets ecosystem in Ireland,” it said.

BNY Mellon declined to comment on the meetings.

The bank also flagged the importance of ensuring a pipeline of talent in the cryptocurrency and blockchain space in Ireland to deliver these services.

“Within BNYM, Ireland are [sic] competing with Israel and New York to source the relevant blockchain expertise. Developing this talent in Ireland at a pace to meet the expected growth will be a challenge.”

BNY Mellon has been operating in Ireland for 25 years and has offices in Dublin, Cork and Wexford with 1,000 staff.