ECB officials prepare to send warning to 19 Eurozone countries over crypto regulation report
Last week, the European Union finalized its Market in Crypto Assets (MiCA) laws. The European Central Bank (ECB) is currently concerned about the possibility of fragmented digital asset regulations among member countries of the bloc, even though the law will soon go into effect.
The recently agreed regulation, known as the Markets in Crypto Assets (MiCA) framework, has received praise from a number of industry leaders and has been dubbed a historic accomplishment that will support the expansion of the European Union’s digital currency ecosystem.
Beyond the region, there are many hopes that the new regulation will act as a workable model for other areas to create their own.
After the final agreement was signed, numerous variations are now being created to show how the new comprehensive regulation will impact important industry players.
MiCA’s Position on Stablecoin
The news of the completed MiCA agreements was shared by Ernest Urtasum, a member of the European Parliament, who also added, among other things, the bill’s position on stablecoins.
He explained via a lengthy Twitter thread: “Agreement between the EU institutions on MiCA: we will have a common harmonized EU-wide regime for crypto-asset issuers and service providers that will provide security for investors and support sustainability while reducing fragmentation and increasing legal clarity.”
He further explained in the twitter thread: “MiCA provides safeguards against cases like the crypto-crash and the collapse of the stablecoin LunaUSD. With restrictions if they are used frequently as a form of payment and a cap of 200 million euros in transactions per day, large stablecoins will be subject to stringent operational and prudential rules.”
The ECB to warn 19 Eurozone Countries Over Crypto Regulation
The ECB intends to issue stern warnings to eurozone nations regarding the need for “harmonizing” regulations on digital assets, according to a Financial Times report. This week’s warning will emphasize the risks of national regulators getting ahead of impending EU rules on digital assets.
Later in July, the ECB Supervisory Board will meet with regulators from 19 EU member states to discuss the implementation of the MiCA bill.
One eurozone regulator observed that it would be challenging to adhere to the ECB’s requirements. The unnamed official stated that there is already pressure on regulators to provide clarity for the market from banks and companies that deal in digital assets. This pressure will only grow if MiCA’s regulations aren’t unified for another 18 months.
It’s very difficult. Is it better to say, “Until it’s in, do what you like, there’s no regulation,” or is it better to try to get a handle on it, given that MiCA [the EU’s digital regulation package] is still 18 months away? The country’s regulator stated.
However, some experts have backed the ECB’s decision. The ECB’s action, according to Richard Gardner, CEO of the digital currency exchange Modulus, makes sense. Digital asset companies might try to game the system by “shopping for favorable jurisdictions” in the absence of uniform regulations.
He continued by saying that different rules might also make things unclear and give international businesses an unfair advantage. The EU’s regulations on digital assets have so far advanced in nations like Germany, France, and the Netherlands.
Prior to the passage of MiCA, financial regulators from individual European Union member states were primarily responsible for managing cryptocurrency regulation within their own borders. However, officials recently reached an agreement on the creation of an authority to oversee anti-money laundering regulations for cryptocurrency firms. The Federal Financial Supervisory Authority, or BaFin, in Germany is in charge of granting licenses to cryptocurrency companies interested in providing services there.
The EU is already drafting additional regulations for digital assets.
The MiCA bill is being replaced by regulations in the EU that are more focused on digital assets. The EU is already debating a bill to establish a specialized and independent Anti-Money Laundering Authority (AMLA), which will oversee AML for digital assets, among other things.
Christine Lagarde, the head of the ECB, made another suggestion that the EU look into regulating the lending and staking of digital assets. Even Lagarde suggested calling the rule MiCA II.
Proof-of-work block reward mining will be governed by the EU as part of environmental sustainability rules. Regulating block reward mining in MiCA was unsuccessful.
EU officials Reach Agreement on the AML Authority to Oversee Crypto Firms.
According to European Parliament member Ernest Urtasun, “we are closing significant loopholes in the European anti-money laundering rules, putting an end to the wild west of unregulated crypto.”
The creation of an anti-money laundering (AML) body with the power to regulate specific crypto asset service providers, or CASPs, has been approved by the European Council.
The council announced on Wednesday that it had reached an understanding on a partial stance regarding a proposal to establish an exclusive anti-money laundering authority, or AMLA. The regulatory body states that “if they are considered risky,” the AML body will have the power to oversee “high-risk and cross-border financial entities,” including cryptocurrency firms.
Ondrej Kovak, a member of the European Parliament, claimed that European Union officials had also come to a “provisional political agreement” regarding the Transfer of Funds Regulation of the governing body.
It was reported that a March draft of the regulation could require cryptocurrency service providers to gather personal data related to transfers of any size made to and from unhosted wallets, as well as potentially verify their accuracy. Not all the specifics of the revision are clear at the time of publication.
“We are closing significant loopholes in the European anti-money laundering rules,” said European Parliament member Ernest Urtasun. “We are putting an end to the wild west of unregulated crypto.” “Where there is no obliged entity involved, the rules won’t apply to P2P transfers […] On a risk-based basis, CASPs will be required to gather data and implement enhanced due diligence procedures with regard to all transfers involving unhosted wallets.
The AMLA was initially proposed in July 2021, and the European Commission states that it should be operational in 2024 and “start the work of direct supervision slightly later.”
The financial watchdog will be among the first regulatory organizations with the power to monitor money laundering across significant portions of Europe, coordinating with the financial intelligence agencies of the respective nations and collaborating with local regulators.
This sweeping new regulation is so intrusive… even the New York Times has said:
An unprecedented power grab hiding in plain sight:
The window to safeguard your money and financial privacy is closing. And it’s rapidly closing fast. I don’t enjoy it one bit but I have been left with little choices. I refuse to standby and let Washington’s control-freak sociopaths confiscate everything I’ve built up over the years.
For this reason, I’ve spent the past several years researching and determining simple, doable techniques that ordinary citizens may use to preserve their money and financial privacy. I highly recommend this Financial First Aid Kit if you are looking for a complete guide to preserving your wealth and financial privacy.