The European Central Bank Intensifies Plans for Crypto Regulation
- The European Central Bank has been seeking ways to harmonize crypto regulation in Europe.
- Soon, crypto service providers will be subject to one regulatory practice aimed at reducing crypto-related scams and improving customer protection in Europe.
According to recent reports, the European Central Bank, or ECB, will alert European Union members about the importance of harmonizing regulations for cryptocurrency as it gets ready to introduce a new law.
Sources revealed that as officials got ready to put the Markets in Crypto-Assets, or MiCA, system into place, the ECB was worried about the potential regulatory clashes between various central banks in the EU and cryptocurrency companies.
Regulatory bodies in Europe, such as the European Parliament, European Commission, and European Council, recently came to an agreement to regulate cryptocurrency service providers and issuers under a single regulatory structure.
The European Central Bank announced plans to hold a supervisory board meeting in July which will be attended by regulators from 19 EU member states to review MiCA . Once deliberations are confirmed, asset service providers will have to abide by particular rules designed to protect investors and inform clients about the risks involved in investing in a volatile cryptocurrency market. The proposed legal framework would also be subject to an 18-month review period, during which EU officials will evaluate it to see if it covers further cryptocurrency-related goods like NFTs.
Crypto Regulation in Europe
The MiCA adoption would change the regulatory landscape in Europe. Prior to this time, financial regulators from independent European Union member states were primarily responsible for managing cryptocurrency regulation within their own national borders. However, officials recently reached an agreement on the establishment of a body that would be in charge of overseeing anti-money laundering rules for cryptocurrency firms.
The European continent seeks to impose more investor protection with the introduction of MiCA. Bruno Le Maire, French Minister for the Economy, Finance, and Industrial and Digital Sovereignty said about MiCA,
Recent developments on this quickly evolving sector have confirmed the urgent need for an EU-wide regulation. MiCA will better protect Europeans who have invested in these assets, and prevent the misuse of crypto-assets, while being innovation-friendly to maintain the EU’s attractiveness. This landmark regulation will put an end to the crypto wild west and confirms the EU’s role as a standard-setter for digital topics.
MiCA will help crypto users avoid fraud activities and defend them against some of the hazards connected with investing in crypto-assets. Presently, users’ rights to protection and compensation are quite narrow, particularly when purchases are made outside of the EU.
However, with the new regulations, crypto-asset service providers will be held accountable if they misplace an investor’s assets and be subject to strict measures to safeguard clients’ wallets. In particular, market manipulation and insider trading are two examples of the types of market abuse that the MiCA will address.