Home Coins Libra (LIBRA) Leaked EU Draft Proposes All-Encompassing Laws for Crypto Assets

Leaked EU Draft Proposes All-Encompassing Laws for Crypto Assets


A leaked version of rules to be issued later this month by the European Commission proposes an all-encompassing set of regulations covering the trading or issuance of digital assets across the 27-nation bloc. 

Europe’s Markets in Crypto-Assets (MiCA) draft legislation provides legal certainty around crypto assets – cryptocurrencies, security tokens and stablecoins – along the same lines as Europe’s Markets in Financial Instruments Directive (MiFID), a legal framework for securities markets, investment intermediaries and trading venues. 

The takeaway is that Europe intends to treat crypto the same as any other regulated financial instrument, which will doubtless provide legal clarity. The unknown is whether that may stifle this nascent and fast-moving space.  

The MiCA proposals begin with a broad definition of crypto assets and a base set of rules that apply to the issuers of those assets and service providers, more or less in line with the Financial Action Task Force (FATF) definition of a virtual asset service provider (VASP).

The rules are particularly focused on stablecoins in Europe, which are defined as either asset-referenced tokens or e-money tokens.

Read more: Inside the Standards Race for Implementing FATF’s Travel Rule

To illustrate the difference, Siân Jones, senior partner at XReg Consulting, referred to the revised second version of libra’s white paper that redefined the token as being denominated in individual currencies. This would likely bring it within the MiCA regulation’s definition of e-money, said Jones.

“Those stablecoins that rely on a basket of currencies or are based by reference to other assets, whether that’s another crypto or other kinds of assets, they will be classed as asset-reference tokens,” Jones said in an interview. “Essentially, the subgroup that behaves like e-money will be sucked into the existing e-money framework, while those that are asset-referenced have a load of extra rules on top of the base rules. So clearly, this is targeting stablecoins and particularly global stablecoins.”

Stablecoin angst?

The attention to stablecoins chimes with comments made last Friday at an informal meeting of five European finance ministers in Berlin, which featured calls for clear regulatory oversight of asset-backed coins like libra. 

In addition to providing legal certainty around all crypto-assets, another core tenet of the proposed regulation is apparently to support innovation. 

“There will be many who will question that,” said Jones, citing the recent explosion in decentralized finance (DeFi) as an example of innovation involving the issuance of blockchain tokens that could be curtailed in Europe.

Read more: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Among the many regulatory obligations that will be imposed on crypto-asset issuers and service providers in the European Union (EU) is the need to be incorporated as a legal entity and for service providers to have their registered office in a Member State, Jones said.

“There can be little doubt MiCA will present significant challenges for those involved in DeFi projects,” said Jones.

The quid pro quo, Jones added, is the sort of regulatory clarity that will likely entice more institutional investment into the crypto space.

“By making crypto just like everything else in the traditional world, you make it easier for the traditional world to accept it,” said Jones. “I would probably say from the draft that it will favor the banks and traditional investment firms. The incumbents will have an advantage in a number of respects, which I’m sure is not the intention, but that will be the short- to medium-term impact.”

The 168-page set of draft rules, which Brussels said would come out in September, will not likely be transitioned into EU law until 2022 at the earliest. As an EU regulation, it will be directly applicable throughout the EEA without the need for national legislation.

Summing up, Jones said the new regulation will probably create something of a bifurcation of the crypto space.

“In a sense, crypto has benefited for much of the last decade from being largely in a grey area,” she said. “But now you have a very clear set of rules – and you are either in or outside it.”



Source

Mr Bitcointe
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
474FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,579FollowersFollow
2,230SubscribersSubscribe
USD - United States Dollar
EUR
1.19
GBP
1.30
CHF
1.10
NOK
0.11
JPY
0.01
CAD
0.76
AUD
0.73

Most Popular

ERC-20 token’s market cap overtakes Ethereum’s

The latest findings by Santiment, published in Cointelegraph Consulting’s biweekly newsletter, suggest that Ethereum is temporarily being ‘professionalized’. Since the September 2nd market crash, the...

GPU Manufacturer Nvidia Buys Chip Maker ARM for $40 Billion

California-based Nvidia is buying British computer chip designer Arm Holdings from Softbank Group Corp. in a deal worth $40 billion.Nvidia, which specializes in...

Timers’ Ongoing IPM Presale Will Help Tackle Challenges of the Next Industrial Revolution

For the first time in history, a human’s intrinsic ‘time value’ is being used as a currency for trading, as IPM is...

Despite yETH returns of 2%, Yearn pushes forward with WBTC Vault

The popular yield farming decentralized finance (DeFi) protocol Yearn Finance is progressing with its forthcoming Wrapped Bitcoin (WBTC) Vault.The team has submitted a MakerDAO...
bitcoin
Bitcoin (BTC) $ 11,005.45
ethereum
Ethereum (ETH) $ 388.19
ripple
XRP (XRP) $ 0.254926
tether
Tether (USDT) $ 1.00
bitcoin-cash
Bitcoin Cash (BCH) $ 238.54
bitcoin-cash-sv
Bitcoin SV (BSV) $ 164.39
litecoin
Litecoin (LTC) $ 49.00
eos
EOS (EOS) $ 2.75
binancecoin
Binance Coin (BNB) $ 28.30
okb
OKB (OKB) $ 6.18
tezos
Tezos (XTZ) $ 2.50
leo-token
LEO Token (LEO) $ 1.19
cardano
Cardano (ADA) $ 0.093549
monero
Monero (XMR) $ 93.22
stellar
Stellar (XLM) $ 0.080034
chainlink
Chainlink (LINK) $ 10.93
huobi-token
Huobi Token (HT) $ 4.85
tron
TRON (TRX) $ 0.029450
usd-coin
USD Coin (USDC) $ 1.00
dash
Dash (DASH) $ 73.11
neo
NEO (NEO) $ 24.46
iota
IOTA (MIOTA) $ 0.278706
nem
NEM (XEM) $ 0.103500
zcash
Zcash (ZEC) $ 59.66
maker
Maker (MKR) $ 493.96
paxos-standard
Paxos Standard (PAX) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 5.20
vechain
VeChain (VET) $ 0.014152
true-usd
TrueUSD (TUSD) $ 1.00
ftx-token
FTX Token (FTT) $ 3.90
kucoin-shares
KuCoin Shares (KCS) $ 1.20
waves
Waves (WAVES) $ 2.52