The European Central Bank is reportedly on track to issue warnings to national authorities within the Eurozone about individual handling of the crypto ecosystem.
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The European Commission, Parliament, and Council trilogy have agreed on the comprehensive cryptocurrency framework, Markets in Crypto Assets (MiCA), and a whole new set of concerns has been pointed out by the ECB.
This concern stems from the likelihood of national regulators within the Eurozone formulating and implementing a make-shift law to guide the interactions with the nascent asset class in the interim. While MiCA has been given the green light, its passage into law is scheduled for 2023, with implementation billed to commence 18 months after that.
That time is a very long one for most countries who may feel the urgency to protect their consumers and investing public.
“It makes sense that the ECB would want to prevent a collection of national laws on cryptocurrencies. For one thing, it could lead to operators shopping for favourable jurisdictions. Beyond that, it will create confusion for multinational operators and create an uneven playing field within the EU. On the other hand, MiCA is so very far away. That it has come so far is a positive sign. However, eighteen months is an eternity in the crypto space,” said Richard Gardner, CEO of Modulus.
The cryptocurrency ecosystem has witnessed many upheavals this year with the hacking of Crypto.com, the collapse of Terraform Labs LUNA and UST stablecoins, and the liquidations of Three Arrows Capital amongst others. Gardner noted that countries want answers to what will happen to investors who can be affected by the ongoing turmoil in the space, adding that he does not think countries will be waiting 18 months to get such answers.
In the ECB’s argument, only a unified implementation of MiCA will bring about the intended result of protecting investors and fueling growth across the board.
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