Tribune. Cryptocurrencies will soon be subject to a supervisory system in the European Union (EU): the Brussels Commission is in fact preparing to propose a directive on crypto-asset markets, known as the “MiCA directive”. According to the Commission’s proposals, only cryptocurrencies authorized in the EU can be sold. As cryptocurrency can take different forms, which are themselves subject to different forms of supervision, the subject is complex for consumers to understand, and it is just as difficult for European supervisors to deal with.
Already present for a few years, cryptocurrencies are becoming more and more popular, despite the fact that they are not subject to any form of surveillance. It is difficult, if not impossible, for an investor or ordinary user to determine whether this is a Ponzi scam, money laundering scams, stablecoins (“Stable currencies”) well-designed or true digital assets. It is also generally unknown where they are based, how they are organized and who is the manager …
The European Commission is the first international organization to propose a specific regulatory framework. Some EU members already have special legislation for cryptoassets and cryptocurrencies, but there is no international agreement on this. Other countries, such as the United States or Hong Kong, apply existing securities laws. This leads to a very vague framework for an innovation like cryptocurrency. A consumer has little idea whether protection exists, especially for transactions that take place outside the EU.
Big question mark
For the European Commission, cryptocurrencies work on blockchain (digital security) or distributed ledger technology (DLT), and can take three forms, depending on a corresponding degree of surveillance: tokens (virtual gadgets), stablecoins, composed of reserve currencies, and pure digital currency, which always offers a fixed hard currency exchange rate. Digital currency can only be issued by banks or fintech companies that have an existing license, the stablecoins only by those who meet minimum (very low) capital requirements.
Non-European cryptocurrencies, such as Facebook’s diem or novi, bitcoin or ethereum, will need to register in one of these forms to be admitted to the European market. A system of mutual recognition is not foreseen, because the regulations are too different at the international level. The consumer risks paying the price, as they will not see any difference between an EU crypto and an international crypto, but will still receive social media advertising for the unregulated crypto.
You have 43.57% of this article to read. The rest is for subscribers only.