In light of recent industry shocks, Christine Lagarde, president of the European Central Bank (ECB), declared again that regulation and oversight of cryptocurrency are “absolutely necessary” for the EU at a hearing of the Committee on Economic and Monetary Affairs of the European Parliament on November 28.
She claimed that the ECB needed to act as an international regulator to confront people’s growing interest in digital assets.
Lagarde further pointed out that FTX’s collapse was more concerned with cryptocurrencies rather than stablecoins or fiat currencies and that the problem was more about “stability and reliability” of an exchange.
She added that when it comes to cryptocurrency regulation, Europe is well ahead of other nations. Lagarde referenced the ECB’s intervention in Facebook’s Libra as an example of how “helpful to stop some of the players” from dealing with crypto businesses.
The ECB’s president wants a “MiCA II” bill—possibly an addition to the legislation that was created for the original Markets in Crypto Assets bill. This is the proverbial “elephant in the room.” The ECB president said in June that the bill “should control the activities of crypto-asset staking and lending, which are undoubtedly rising.”
Subject to legal and linguistic reviews by EU parliamentarians, the Markets in Crypto Assets bill is awaiting final approval. Following trilateral talks between the EU Council, the European Commission, and the European Parliament, the MiCA framework was approved by the economics committee of the European Parliament in October.
In order to avoid a fiasco similar to the collapse of USDT, MiCa also establishes stablecoin reserve requirements. Additionally, the law requires that companies involved in the cryptocurrency industry, such as wallet providers and exchange platforms, seek licensing from national regulators.
Many anticipate the policy’s implementation will be pushed to 2024. It was also disclosed to the publishing house. A rough plan for the parliament to vote during its December plenary session had been canceled, considering the length and complexity of the document.
A spokesperson for the European Parliament told a news publishing house that MPs will vote on the Markets in Crypto Assets Act (MiCA) in February, which is expected to cause more delays to the existing licensing system for cryptocurrency businesses in the EU.
Many countries in the EU are awaiting a crypto rule book to address issues in the sector, and while the MiCA is awaiting approval many nations are either adopting temporary laws or amending their laws influenced by the MiCA’s drafts.
Belgium’s Financial Services and Markets Authority (FSMA) recently announced a “stepwise plan” that will run by the idea that computer code issued cryptocurrencies do not count as securities would be classified as securities if they were issued by an individual or company, even if this was not legally binding under Belgian or EU legislation.
In September, Ukraine’s Ministry of Digital Transformation said that the country must modify its national legislation to meet European criteria because it has been given the status of a candidate for EU membership.