When Europe is wary of stablecoins. For a majority of observers, MiCA regulations (Markets in Crypto-Assets) has been well received. However, Europe remains cautious. And there are certainly some points of debate. Such is the case of the limitations imposed by the bill on daily stablecoin transactions. Here are some explanations.
Is Europe on the road to wise regulation?
Without regulation, there will be no adoption, that’s for sure. That’s why exchanges and companies in the crypto sector willingly bow to the demands of regulators. They have no choice if they want to capture the next share of this market: the general public. A massive share, which far exceeds the handful of cranks and early adopters who have turned their noses up at these strange digital objects in recent years.
The only problem is that this is not an easy task. It requires a clear legal framework, and a great deal of negotiation with wary regulators. This is particularly the case in the USA, where the SEC (Securities and Exchange Commission) is peppering American players with sanctions. Even to the point of forcing them to flee the country in search of greener pastures.. In Europe, however, it would seem that we have chosen to frame rather than ban. Clearly a wise choice, since Asia, is going full speed ahead on the two rails of adoption. And their train is going straight ahead.
If we want to keep our place on the international technology scene, we certainly can’t put on the brakes. We don’t stand a chance against a speeding train. We have to go with the flow, and if possible, position ourselves in the lead car. MiCA, adopted on May 31, gives us the opportunity toestablish a clear legal frameworkand, let’s hope, an intelligent one. A crucial issue for developing the sector in Europe and attracting foreign capital and brains.
« MiCA was officially signed into law today by European Parliament President Roberta Metsola and EU Council President Peter Kullgren. »
Except that certain portions of this regulation in the making have the makings of a major breakthrough. scare investors. Explanations.
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MiCA must regulate without restricting the crypto sector
The fear is that excessive regulation will stifle companies in this emerging sector and force them to flee Europe. This would spell the end of the game for a territory that needs to take advantage of the USA’s current weakness in this tech sector.
However, hidden in this text is a prohibitive and controversial measure: the 200 million euro limit for daily stablecoin transactions. A ridiculously low value compared to the volumes already circulating today, in the middle of the bear market. To give you an idea, over a 24-hour period, the volume traded against the USDT was 14 billion dollars.
An incoherent measure for an ecosystem that is supposed to support the development of tomorrow’s finance.
« Because of their strong link with the traditional financial system (…) regulators are particularly concerned by the impact [potentiel] that the failure of a stablecoin could have. »
Chander Agnihotri, legal director of law firm Clyde and Co.
It’s not impossible, moreover, that these limitations on stablecoins could ultimately encourage the development of MNBC, central bank digital currencies. The latter will probably benefit from unlimited volumes.
However, if only Europe adopts this type of restrictive limitationOnce again, this will benefit Asian and even global competitors, who are far from adopting such capital barriers. Events which, if they occur, may well cause the EU to backtrack on this very point.
« Like all legislation, there will be parts that will be made to evolve. »
Chander Agnihotri
Tether’s chief technology officer, Paolo Ardoinodescribes MiCA regulations as » the most comprehensive to date for the industry « . In his view, these volume limitations for stablecoins could be implemented for certain uses only. If this were the case, it would be a real thorn in the side of the industry, and would allow Europe to try and keep up with Asia. To verify this, we look forward to seeing you in 2024 for effective application of the law.
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