The Belgian financial watchdog has confirmed its position that Bitcoin (BTC), Ether (ETH) and other cryptocurrencies issued solely by computer code do not constitute securities.

Explaining a report from the Belgian Financial Services and Markets Authority (FSMA) on 22 November Report, Its draft is open for comments in July 2022.

According to the FSMA, the clarification follows an increase in demand for answers on how existing Belgian financial laws and regulations apply to digital assets.

While not legally binding under Belgian or EU law, the FSMA said that under its “step-by-step plan,” cryptocurrencies will be classified as securities if issued by individuals or entities”:

“If there is no issuer, for example in the case where the instrument is created by computer code, which is not done in the execution of an agreement between the issuer and the investor (e.g. bitcoin or ether), then in principle the prospectus regulation, Prospectus laws and MiFID rules of conduct do not apply.”

The Belgian regulator noted that cryptocurrencies not classified as securities may still be subject to additional regulations if the company uses the digital asset as a medium of exchange:

“However, if the instruments have a payment or exchange function, additional regulations may apply to the instruments or persons providing certain services in connection with those instruments.”

The FSMA also noted that its step-by-step plans are technology-neutral — suggesting that it doesn’t matter whether digital assets exist and are facilitated on a blockchain or through other traditional means.

The FSMA first drafted the report in July 2022 as a way of addressing frequently asked questions from Belgian digital asset issuers, issuers and service providers.

The FSMA said that a step-by-step plan will serve as a guideline until the European Parliament’s Market Regulation in Cryptoassets (MiCA) is passed, namely expected To be effective in early 2024…

related: Belgian lawmaker says not taking time to understand BTC is ‘biggest risk in Europe’

Belgium’s clear guidelines stand in stark contrast to the “regulation by law” approach that the U.S. Securities and Exchange Commission (SEC) is currently battling with the U.S. Commodity Futures Trading Commission (CFTC) for regulatory control of digital assets.

While SEC Chairman Gary Gensler has long argued that BTC constitutes a commodity, he recently argued that combined ETH and other collateralized tokens could constitute securities under the Howey test.

According to a recent study by blockchain data platform Chainalysis, Belgium has not yet been a large adopter of digital assets ranking Belgium ranks 94th in its global crypto adoption index.

Residents of European countries can access 10 cryptocurrency exchanges, according to Fetch data from encrypted data resource Bitrawr.