Europe Tightens the Reins on Stablecoin Issuers: A New Era or A Step Back?

The European Banking Authority (EBA) has drafted rules, known as the Markets in Crypto Assets (MiCA), introducing additional requirements for stablecoin issuers. The regulations highlight potential systemic risks associated with asset-referenced tokens (ART) and e-money tokens (EMT). Measures include additional obligations, greater supervision by the EBA, and increased reserve requirements.

EU’s MiCA Regulation: Impact on Crypto Assets, Stablecoins and NFTs, and Investor Protections

The European Union is preparing to implement the Markets in Crypto Assets (MiCA) regulation by July 2023, covering crypto-assets and their issuance, trading, and offering. MiCA aims to update the EU with new technologies, introducing stricter rules on stablecoins, increased disclosure obligations for crypto businesses, and implementing anti-money laundering and data security procedures. However, it does not apply to non-fungible tokens (NFTs).

Unbacked Cryptocurrencies: Ponzi Schemes or Legit Investments? Central Bank’s Dilemma

Central Bank of Ireland Governor Gabriel Makhlouf likens unbacked cryptocurrencies to a “Ponzi scheme” and emphasizes the importance of differentiating between ‘backed’ and ‘unbacked’ crypto. The recent approval of MiCA by the European Parliament marks a significant step in cryptocurrency regulation, acknowledging the potential of cryptocurrencies while protecting consumers and investors from unwarranted risks.