The European Union financial markets watchdog, the European Securities and Markets Authority (ESMA) continues to pave the path towards cryptocurrency regulation. Its latest endeavour is the release on October 5 of a second consultation paper on the Markets in Crypto Asset (MiCA) regulation, employing stakeholders’ participation from across the crypto market for a trouble-free integration due in 2024.
In pursuing a balanced outlook on the crypto sphere, the ESMA has pointed out five main aspects for suggestions from blockchain firms, asset issuers, and crypto executives. The areas covered encompass sustainability indicators and their impact on the climate, consistency and punctuality in crypto services, pre- and post-trade data visibility for everyone, order book records and record-keeping by Crypto Asset Services Providers (CASPs), white papers’ readability and registration, and the technological means for suitable public exposure of internal intel.
Blockchain sustainability and its impacts on the environment is a prevalent point of contention among regulators and environmental activists. In an effort to minimize the adverse environmental influence of crypto activities, the authority is requesting stakeholders to contribute their echoes on fossil fuel use, energy intensiveness, node-forming equipment type, and the sector’s total waste production.
ESMA goes further to note their plan to structure a framework to measure the environmental sustainability of consensus mechanisms. The proposed model touches upon factors such as the energy consumption of distributed ledger technology (DLT) network nodes, their geographical locations, and prospective devices used.
As the crypto market expands, the urgency for steadfastness and regularity in the operations of crypto enterprises is also paramount. The regulatory body uses MiCA business continuity standard as a reference point, urging firms to create a business continuity policy that includes an ICT system, online trade data preservation, and swift recovery of digital asset services.
Transparency is another critical aspect under scrutiny. Referring directly to Article 76 (16)(a) of MiCA, ESMA stresses the importance of pre and post-trade data being made accessible to the public. This principle desires crypto service providers to divulge bid and ask prices, interests, and transaction details during the pre-trade phase.
In the post-trade scene, it is essential for companies to maintain a record of the transaction time, price, and volume on their platforms, and to ensure this crucial information is constantly visible in real-time.
In conclusion, ESMA’s ongoing effort towards regulation will help shape the future of the cryptosphere. Linked with potential environmental impacts and the importance of transparency, these new guidelines provide a clear approach to fulfilling the need for crypto regulation without hindering the growth and potential of blockchain technology.
Source: Cryptonews
