Cryptocurrencies under high security – This is the question that arises US regulation for several years nowand the one to which a recent study ordered by the European Parliament. In response, the report highlights the need to treat cryptocurrencies as default securities, implying the need for additional measures even as the European Union finalizes its regulations on the crypto market.
The report that plays the security card for cryptos
It would seem that in one report Coming from a panel of academics and universities from Luxembourg, Sydney and Hong Kong, the question that haunts American regulation, in particular the undecided and inconstant Gary Gensler, has been resolved.
Indeed, according to this report, it is imperative to treat all crypto assets as transferable securities by default. In other words, this means that they would have to comply with strict “European Union governance and authorization” rules, just like traditional stocks and bonds.
In fact, therefore, the report explains that this approach would completely revise theextent of regulation on the crypto industry, thus emphasizing that without additional measures, the MiCA regulation – yet voted a short time ago – risk of producing “ short-term mixed results. » The authors of the report are skeptical of the immediate positive effects of MiCA in “this opaque context. »
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Commodity or Security? bitcoin on the wire
Let’s get to the root of the problem. In the financial field, a commodities refers to a commodity exchangeable on the market, such asgoldTHE oil where the wheat. Commodities are generally traded on their intrinsic value and are subject to regulation.
On the other side, a transferable value (security) represents a negotiable financial security, such as a stock, bond or derivative security that gives its holder ownership rights over a company or entity. Securities are regulated to protect investors and ensure the transparency of financial markets.
However, and this is one of the problems across the Atlantic, it is not possible to put all the eggs in one basket. Bitcoincreated by Satoshi Nakamotothe first blockchain and queen of cryptocurrencies, differs from others, such as, for example,Ethereum in terms of structure and functionality. A distinction that makes difficult the classification of Bitcoin as a security.
No, Bitcoin is not a security
Bitcoin is a payment system peer to peer with the goal of being a decentralized digital currency. It was not originally designed as a platform to run smart contracts or decentralized applications. Unlike the ethereum blockchain – to continue with the same example – which is designed to support functionality, allowing the creation and execution of smart contracts.
Thus, Bitcoin is primarily seen as a medium of exchange and a store of value. Its main use is in financial transactions, market speculation and custody. Ethereum, on the other hand, is designed to be a complete blockchain that allows the deployment of decentralized applications (dApps) or smart contracts, which Bitcoin for example does not support (at least not in a simple and ergonomic way).
These two examples, which are only an illustration of the differences that mean that cryptocurrencies cannot all be classified in the same basket, somewhat underline the limits of this report, which does not seem to take into account, for example, the endless trial of Ripple and its XRP, considered a security for the SEC – while this consideration is not yet official.
It is not for us to remake the world, however, it would seem that the clear opinion of this text commissioned by the European Parliament rubs off with the characteristic hesitation of the American regulation which is struggling to find a legal framework for Bitcoin and cryptocurrencies. WhileEthereum was still under threat last week and that its co-founder, Vitalik Buterin, calls for minimalism, exile has already begun for crypto companies, like Coinbase or Gemini who prefer to look elsewhere if crypto is greener and safer.
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