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The European Union reached final agreements on the Market in Crypto Assets (MiCA) laws last week. While the law is to come into force shortly, the European Central Bank (ECB) is presently concerned about the likelihood of digital assets regulations becoming fragmented among member nations of the bloc.
According to a Financial Times report, the ECB wants to issue stern warnings to eurozone countries about the necessity of “harmonizing” digital assets regulations. The warning will be issued this week and will emphasize the dangers of national regulators getting ahead of pending EU digital assets rules.
An ECB supervisory board meeting with regulators from 19 EU member states is also scheduled to happen later in July to discuss the implementation of the MiCA bill.
One eurozone regulator commented that keeping with the ECB’s requirements would be difficult. The unnamed official noted that regulators are already under pressure from banks and digital assets companies to provide clarity for the market. Waiting 18 more months for MiCA to harmonize regulations will only increase this pressure.
“It’s very challenging. With MiCA [the EU’s digital regulation package] 18 months away, are you better to say, ‘until it’s in, do what you like, there’s no regulation’ or are you better to try to get a handle on it?” the national regulator said.
However, some experts have expressed support for the ECB’s move. Richard Gardner, the CEO of the digital currency exchange Modulus, said that the ECB’s move makes sense. Without uniform regulations, digital asset firms could try to play the system by “shopping for favorable jurisdictions.”
He added that differing rules could also create confusion and an uneven playing field for multinational operators. Countries in the EU like Germany, France, and the Netherlands have so far been making progress with digital assets regulations.
EU is already working on more digital assets regulations
The EU is moving from the MiCA bill to more digital assets-focused regulations. The EU is already deliberating on a bill to create a dedicated and independent Anti-Money Laundering Authority (AMLA) that will, among others, provide AML oversight for digital assets.
In another proposal, the ECB’s head Christine Lagarde suggested for the EU to look into regulation staking and lending digital assets activities. Lagarde even suggested naming the regulation MiCA II.
Meanwhile, the EU also intends to regulate proof-of-work block reward mining as part of regulations for environmental sustainability. Attempts to regulate block reward mining in MiCA failed.
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