The clarification comes after increasing requests for answers on how existing Belgian financial laws and regulations apply to digital assets, according to the FSMA.
Although not legally binding under Belgian or European Union law, the FSMA said that under its “step plan” cryptocurrencies would be classified as a security if issued by an individual or entity”:
“If there is no issuer, as in cases where the instruments are created by computer code and this is not done in the execution of an agreement between the issuer and the investor (for example bitcoin or ether), then in principle the prospectus regulation applies, the prospectus Act and the MiFID rules of conduct do not apply .”
The Belgian regulator noted that cryptocurrencies that are not categorized as securities may still be subject to different regulations if a company uses a digital asset as a medium of exchange:
“However, if the instruments have a payment or exchange function, other regulations may apply to the instruments or persons who provide certain services related to those instruments.”
FSMA also noted that its phased plan is technology neutral – suggesting that it is irrelevant whether digital assets exist and are facilitated on blockchain or other traditional means.
FSMA first proposed the report in July 2022 as a means to address frequently asked questions of Belgian digital asset issuers, offerors and service providers.
FSMA said the phased plan will serve as a guide until the European Parliament’s Markets in Crypto Assets (MiCA) regulation is adopted, which is expected will enter into force at the beginning of 2024.
Belgium’s clear guidance contrasts with the “regulation by enforcement” approach adopted by the US Securities and Exchange Commission (SEC), which is are currently vying for regulatory control of digital assets with the US Commodity Futures Trading Commission (CFTC).
While SEC Chairman Gary Gensler has long considered BTC a commodity, he recently claimed that post-Merge ETH and other staked coins may constitute a security under the Howey test.
Belgium has not yet been a big adopter of digital assets, with a recent study from blockchain data platform Chainalysis ranking Belgium ranks 94th in its global cryptocurrency adoption index.
Residents of a European country have access to 10 crypto exchanges, according to to data from the Bitawr crypto data source.