Lagarde’s Plea for Regulation
Christine Lagarde, the head honcho of the European Central Bank (ECB), is sounding the alarm about crypto regulation. At a recent hearing of the Committee on Economic and Monetary Affairs in the European Parliament, she emphasized that the regulation and supervision of cryptocurrencies is not just a suggestion—it’s an “absolute necessity.” This urgency comes on the heels of the notorious collapse of the crypto exchange FTX, a disaster that left many wondering what the heck is going on in the crypto world.
Learning from the Past: The Libra Precedent
Lagarde points to Facebook’s ill-fated Libra as an example where European oversight made a difference. She argued that their proactive stance helped keep some players from diving headfirst into the murky waters of crypto. But with FTX, the stakes were even higher. Lagarde highlighted that this scandal was less about stablecoins and more about the “stability and reliability” of the platforms people are investing their hard-earned cash into.
Europe’s Advantage on the Crypto Regulation Road
“At least Europe is ahead of the pack,” Lagarde proudly stated. However, she’s not sugarcoating it; she insists this is just the beginning. She mentioned the necessity for a MiCA II, which would extend regulatory coverage to a broader range of crypto activities. So, expect more regulations on the horizon—hopefully before more exchanges suffer a disastrous fate.
The MiCA Framework: What’s Going On?
The Markets in Crypto Assets bill, affectionately known as MiCA, is making its way through the bureaucratic maze and is awaiting final approval after some legal nitpicking. After fruitful trialogue negotiations involving the EU Council and European Commission, the MiCA framework was given the green light in October. Most insiders appear to believe this regulation will kick off in 2024, so cross your fingers for a smoother ride in the crypto market.
The FTX Fallout: A Wake-Up Call for Regulators
In light of the FTX fiasco, European Parliament’s economics committee member Stefan Berger also championed the call for stronger regulations. He lamented, “The FTX case makes it clear what dangers a completely unregulated crypto market and crypto exchanges without licenses entail.” According to him, the MiCA framework directly addresses these risks, and without it, we could find ourselves dealing with more crashes and chaos.
Looking Ahead: Digital Euro and Future Regulations
As if regulating the existing crypto landscape isn’t enough, the ECB is also knee-deep in exploring the digital euro. In fact, they’re currently in a two-year investigative phase to see how online payments, authenticated by third parties, could function in the EU. Officials are hoping to put legislation concerning the digital euro on the table as soon as 2023. Who knew that we would need to wait to see if our euros would be digital or just your run-of-the-mill paper bills? Stay tuned.
+ There are no comments
Add yours