ECB Officials Prepare to “Harmonize” Regulations for Cryptocurrencies

ECB Officials Prepare to “Harmonize” Regulations for Cryptocurrencies

It seems that the European Central Bank, or ECB, is preparing to apply a new law warning the member states of the European Union about the need to harmonize regulations for cryptocurrencies.

According to a Sunday report from the Financial Times, The ECB was concerned about possible regulatory overlap between the respective EU central banks and companies handling cryptocurrencies, as officials prepare to implement the “Markets in Crypto-Assets” framework, or MiCA. The European Parliament, the European Commission, and the European Council reached an agreement on June 30 to bring cryptocurrency issuers and service providers within their jurisdictional control under a single regulatory framework.

Regulators from 19 EU member countries are supposed to attend a supervisory board meeting in July to discuss MiCA and its possible adoption. Once enforced, the law will require asset service providers to adhere to certain requirements aimed at protecting investors, as well as warning clients of the potential risk of investing in the volatile cryptocurrency market. EU officials will also have an 18-month review period to assess the proposed regulatory framework and determine whether it includes other cryptocurrency-related products, such as non-fungible tokens, or NFTs.

“It’s quite a challenge,” an unnamed national regulator said. “With MiCA at 18 months, is it better to say ‘until it’s there, do what you want, there’s no regulation’ or is it better to try to put a control in place?”

Prior to the passage of the MiCA framework, financial regulators in European Union member states largely had to handle crypto regulation within their own borders, though officials recently reached an agreement to form an authority to oversee anti-money laundering regulations for cryptocurrencies. In Germany, the Federal Financial Supervisory Authority, or BaFin, is responsible for issuing licenses to crypto companies interested in offering services within the country.

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