A research carried out by the European Parliamentary Research Service (EPRS) suggests that regulators from non-European Union (EU) regions need to impose stricter controls on cryptocurrency to ensure greater market stability and development. A motive for this suggestion is the impending implementation of the Markets in Crypto-Assets Regulation (MiCA) Act, scheduled to be active by December 2024.
The report dwells heavily on the potential repercussions on financial stability if these changes fail to take place, citing diminished market appeal and the hindrance of stablecoins achieving mainstream use as key concerns. At the heart of the matter lies the worry that the EU’s fiscal system remains vulnerable, being highly dependent on non-EU nations’ policies where MiCA applies.
Upon examining the United States, the report found a disjointed regulatory scene, with multiple state and federal stakeholders contributing to an ambience of uncertainty and confusion surrounding legal and regulatory aspects. The United Kingdom’s Financial Services and Markets Act (FSMA) and the upcoming divergence in crypto-assets identification between the UK and the EU were also noted.
On September 18, The Malta Financial Services Authority (MFSA) launched a public consultation to align its crypto regulations with the upcoming MiCA regulations better. The revised rulebook proposes changes to the regulations for exchanges, custodians and portfolio managers in line with the EU’s MiCA.
The need for this alignment might further be underscored if we take into account a recent investigation in Poland, where the Personal Data Protection Office (UODO) is investigating OpenAI’s ChatGPT. An anonymous applicant alleges that OpenAI handles data in an “unlawful and unreliable” way and doesn’t offer clear rules regarding data gathering and processing.
Notably, this isn’t the first occasion OpenAI’s commitment to data privacy is questioned. Earlier this year, Italian data protection authorities temporarily blocked the AI chatbot and initiated an investigation around its potential data privacy breaches.
In the relative tug of war between innovation and regulation, there is an imperative need for a balance that protects investors and the market, while not stifuffling the creative spirit that drives the crypto industry. The interplay between the decisions of EU and non-EU nations will undoubtedly have profound implications on how crypto-assets are managed and perceived internationally. This, along with the actions companies such as OpenAI, take to comply with privacy laws, will form a crucial part of the crypto narrative moving forward.
Source: Cointelegraph
