334. While the market capitalisation of Crypto-Assets (CAs) remains small at this point, we are seeing a growing interest for investment products using CAs as underlying. In January 2019, ESMA published an Advice on Initial Coin Offerings (ICOs) and CAs to the European Commission, Parliament and Council. The Advice clarifies the circumstances under which certain CAs may qualify as financial instruments and the regulatory issues that arise when applying the existing set of EU rules to those CAs. In addition, it highlights the important risks that remain unaddressed where CAs fall outside of the regulated space. The Advice requests that the EU policymakers address these risks and issues.

335. Following on the ESMA's Advice, on 19 December 2019 the European Commission launched a consultation on EU regulatory framework for CAs. The purpose of that consultation is to prepare potential proposals aiming at promoting digital finance in Europe, while adequately regulating its risks.

336. The consultation covers various aspects of CAs, including their current use and classification as well as stakeholders' views on a possible regulatory approach to those crypto-assets that currently fall outside the scope of the EU financial services legislation. Moreover, the consultation seeks stakeholders' views on issues relevant for the application of the existing regulatory framework to those CAs that qualify as MiFID II financial instruments. In particular, section IV.8 of the consultation includes a question whether stakeholders foresee any legal, operational or technical issues with the application of current EMIR provisions (incl. reporting) in the distributed ledger technology environment.