- According to European Banking Authority Chair José Manuel Campa, the agency cannot currently supervise digital assets.
- Campa also admitted that 2025 is a long journey from now, and the crypto market could be moved and transformed from its current state.
To effectively control the crypto market, the European Union has drafted rules expected to take effect in 2025. However, there is a huge concern as the European Union’s banking regulators have expressed worries about this implementation. According to European Banking Authority Chair José Manuel Campa, the agency cannot currently supervise digital assets. In his statement, he explained that there is a high demand for crypto talents. For this reason, it is very challenging to hire and retain them for the crypto rule implementation.
Campa also admitted that 2025 is a long journey from now, and the crypto market could be moved and transformed from its current state. This will demand some details of the rules be fleshed out and some additions made. Till the rules become effective, planning the logistics to implement its new powers is a huge concern as EBA does not know the cryptos it could supervise before the time.
My concern is more about making sure the risk we have identified … is properly managed. If we don’t do as well as we should have, we’ll have to live with the consequences.
Markets in Crypto Assets (MiCA) proposed in 2020
Recently, the European Union policymakers had an agreement with the landmark legislation to put crypto assets and service providers under regulation throughout its 27 member nations. For close to two years, the policymakers had been working on the Markets in Crypto Assets (MiCA) framework. As part of the rules, crypto issuers were put under strict requirements to provide a whitepaper as part of their registration with authorities. This was also done to ensure that they keep proper bank-style reserves for stablecoins.
The confirmation of the agreement was initially tweeted by Stefan Berger, the parliamentarian in charge of seeing MiCA through the EU’s legislative process. Later, the European Commission’s Mairead McGuiness spoke about the agreement that she thinks everybody understands that it is important not to leave a sector unregulated. Recently, she also called on the US to cooperate on crypto regulation.
No legislation is ever set in stone, and no legislation in the area of crypto could be. Those who are in this space and are thinking of being innovative will now do it in a way that sits within our regulations rather than in the Wild West.
The European Commission, in September 2020 originally proposed the MiCA in an attempt to control the rampant crypto fundraising projects called the Initial Coin Offering (ICO). However, it needed approval from the EU governments and lawmakers. It is important to note that the US is also working on rules of its own with a special focus on the stablecoin market.