Thomas Pringle (Donegal, Independent)
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299. To ask the Minister for Finance if his Department has instituted any mechanisms for determining the environmental impact of certain categories of digital financial transactions, such as the sale and purchase of cryptocurrencies; and if he will make a statement on the matter. [8202/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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With regards to the sale and purchase of cryptocurrencies, it has always been my intention that any regulation in this space would be adequate, proportionate and comprehensive without discouraging innovation.

In September 2020, the European Commission published the Digital Finance Package containing measures which aim to enable and support the development of digital finance while mitigating risks.

The Digital Finance Package includes:

1. Strategy on Retail Payments

2. Legislative proposal on a market in crypto-assets (known as the MICA regulation)

3. Legislative proposals on digital and operational resilience (known as the DORA regulation)

4. Legislative proposal on a pilot regime for market infrastructures based on distributed ledger technology (known as the DLT pilot).

On 24 November 2021, the European Parliament announced that it had reached agreement with the Council on the DLT pilot scheme.

In the final text on paragraph 18a of the DLT Pilot Regime, specific references are made to the interaction of climate policies and the pilot. The text cites the need for “the operation of a DLT market infrastructure should not undermine Member-States climate policies. Thus, it is important to further encourage the development of and investments in low or zero emission DLTs”.

On MICA, the European Parliament is still reviewing the proposal. The Council reached general agreement under the Slovenian presidency in November of 2021. The expectation is that trilogues would commence under the French presidency. The discussions are still ongoing and it is not possible to say at this point in time whether the result of the trilogues will result in an agreement to include a reference to the environmental impact of certain categories of digital financial transactions in the regulation.

In Ireland, as of 23 April 2021, the providers of certain services in relation to virtual assets (digital assets or cryptocurrencies) must meet anti-money laundering and countering of financing of terrorism (AML/CFT) obligations, under part 4 of the CJA 2010 to 2021.

All VASPs (virtual asset service providers) established in Ireland are required to register with the Central Bank for these AML/CFT purposes.

Finally, my Department will continue to work closely with our partners in the European Union to ensure that the appropriate regulation recognises the risks presented by crypto assets including but not limited to their impact on climate objectives.