A person on the European Central Bank’s Supervisory Board said that the rules in a law called “Markets in Crypto-Assets” (MiCA) might not be enough. They will help prevent cases like FTX, but there are some areas we need to make stronger.
“EU Crypto Laws Not Strong Enough
Elizabeth McCaul, a person on the board in charge of supervising of money matters in Europe (the European Central Bank Supervisory Board), published a blog post about how to make laws and rules for cryptocurrency. She said that the rules given by the European Union are not strong enough and must be made stronger to protect people from risks connected with cryptocurrency. This month, the people in charge of making laws for the whole union (European Parliament) will vote on a bill called Markets in Crypto-Assets (MiCA). Elizabeth thinks this is important.
“The ECB board member said that even though the recent Basel standard and MiCA are important steps forward, they might not be enough. She added that those companies providing crypto asset services need to face certain rules and be supervised more closely, since MiCA cannot provide it.”
When talking about a new law called MiCA that is meant to prevent incidents similar to the FTX case, it was said that while there will be strong rules like keeping customer money separate and getting annual audits, “some areas could still use more work”.
McCaul was worried about how the size of crypto companies are measured. She argued that the FTX crypto exchange that had shut down would not have been considered a big company in the eyes of MiCA, because it never had more than 15 million active customers.
Binance is the biggest company in crypto world, and according to reports, it has between 28 million and 29 million active users across the world. But this isn’t enough for Binance to be considered a big deal in Europe.
The boardmember from ECB also talks about how they need to create new standards so that different types of businesses can be gauged – like trading volume for trading platforms or assets under custody for custodian businesses.
A board member of the European Central Bank (ECB) said that the EU’s current rules on cryptocurrency are not strong enough. She suggested that when thinking about thresholds, we should look at the group level instead of dealing with each entity seperately because this could be too complicated. Also, it is important to be aware of any conflicts between groups and their associated companies or entities. Do you agree with what the ECB board member said about crypto rules? Let us know what you think in the comments below!
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