On May 25, Verena Ross, Chairperson of European Securities and Market Authority (ESMA), stated in an interview that she is looking forward to MPs passing the EU’s framework for crypto regulation into legislation. Growing inflation, she believes, will compel retail investors to engage in risky cryptos while looking for assets that will compensate for inflation and provide higher returns, potentially leading to increased risk-taking. Currently, national authorities in the EU are in charge of the crypto business, which is governed by local legislation. As a result, each country’s strategy to regulate the emerging asset class differs.
ESMA chairperson Ross emphasised crypto exchanges while discussing the need for a single regulatory framework in the EU, saying:
“There is no EU regulatory framework for these kinds of entities at the moment, and so there is currently an imbalance in how national supervisors deal with these entities and how they judge them. That’s where a common regulatory framework will help.”
The EU is banking on the Markets in Crypto-Assets Legislation (MiCA), a draft framework proposed in September 2020, to standardise crypto regulation. The road to MiCA’s implementation has been long and winding. The European Parliament and Council are presently debating the document.
Despite this development, Ross shows confidence that the European Parliament and Council will complete the review process in the coming months and put the MiCA into law in 2023 or 2024. Apart from Ross, Christine Lagarde, the President of the European Central Bank, has also advocated for crypto regulation. Earlier this week, she stated that cryptocurrency is worthless. Francois Villeroy de Galhau, a member of the Governing Council, continued to criticise the crypto sector, claiming that its promises and rewards are illusory.
In addition, the ECB expressed reservations about the crypto industry’s complete integration with traditional finance. The regulator emphasised how crypto investors weathered a €1.3 trillion ($1.39 trillion) market drop without jeopardising financial stability in a Financial Stability Review.
Read more:
- Only 10% of Europeans holds crypto: ECB Survey
- Taiwanese Crypto firm XREX all set dive in European market
