A key regulator charged with overseeing Europe’s landmark bid to regulate cryptocurrencies views its ability to hire specialised staff as a “major concern”, highlighting worries over authorities’ capacity to supervise digital asset markets.
José Manuel Campa, chair of the European Banking Authority, said that his organisation was also worried about the logistics of planning for its new powers since it will not know which digital coins it has authority for supervising until very close to 2025, when Europe’s sweeping new crypto regulations are due to come into force.
Mr Campa said in an interview that the retention of talent was already a “major concern ... particularly in the areas of technology, anything related to crypto, digitisation [or artificial intelligence]. This is in high demand across society.”
The Paris-based EBA, set up in the aftermath of the financial crisis to ensure Europe’s banks had enough capital to weather future storms, is tasked with supervising “significant” tokens that are widely used as a means of payment and popular tokens linked to traditional assets, under Europe’s proposed Markets in Cryptoassets Regulation.
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The regulator’s comments underscore difficulties faced by other authorities trying to get to grips with the fast-moving digital asset sector.
Banks, fintechs and consultancies have been offering lavish packages to woo experts whose skills are most in demand. Record inflation across the euro zone has also driven higher wage demands, as employees seek packages to offset cost of living increases.
The EBA’s salaries are aligned with those of the European Commission, and Mr Campa said that giving the regulator a free hand on pay was “not within the range of possible discussions” between the EBA and the Commission.
Mr Campa said the EBA is also concerned that, unlike bank supervision, the set of institutions it will have to supervise is not defined and could be changed at the last minute. “So I don’t know exactly what I would be confronted with in two years,” he said.
He said the “very dynamic” nature of the crypto sector means that regulation “naturally tends to go behind the curve”. Mr Campa acknowledged that in three years’ time crypto may have “moved and transformed into other uses that I cannot anticipate”.
Still, Mr Campa said he was not concerned about the reputational risk should the EBA get it wrong on a sector dubbed finance’s “wild west” by Gary Gensler, head of the US Securities and Exchange Commission.
“My concern is more about making sure the risk we have identified ... [in the crypto market] is properly managed. If we don’t do as well as we should have, we’ll have to live with the consequences,” he said. — Copyright The Financial Times Limited 2022
