Christine Lagarde, President of the European Central Bank (ECB), has once again called cryptocurrency regulation and supervision an “absolute necessity” for the EU following the collapse of cryptocurrency exchange FTX.
In a hearing held on November 28 in the Committee on Economic and Monetary Affairs of the European Parliament, Lagarde cited Facebook’s Libra as an example of ECB involvement, which was “useful in stopping some of the players” from cryptocurrency companies.. However, he said that the situation with FTX — which is dedicated to crypto assets as opposed to stablecoins — had more to do with the “stability and reliability” of the exchange and that the ECB needed to step up as global regulator to cope with the growing interest of people for digital assets.
“At least Europe [en el camino de la regulación de las criptomonedas] goes ahead”said the ECB president. “But as I said before, it is a step in the right direction. This is not all – there will have to be a MiCA II, which covers more broadly what it intends to regulate and supervise, and that is very necessary.”
Introductory statement by President Christine @Lagarde at the hearing of the Committee on Economic and Monetary Affairs of the European Parliament https://t.co/GKnkOJHh9p
—European Central Bank (@ecb) November 28, 2022
Introductory statement by President Christine @Lagarde at the hearing of the European Parliament’s Committee on Economic and Monetary Affairs
The Bill on the Crypto Asset Markets, or MiCA, is awaiting final approval after legal and linguistic checks by EU lawmakers. The European Parliament’s economic committee accepted the MiCA framework in October following trialogue negotiations between the Council of the EU, the European Commission and the European Parliament. Many expect the policy to take effect from 2024.
Lagarde referred to MiCA II — presumably additional legislation based on the work of lawmakers for the original bill — in June.. At the time, the ECB president said that the framework “should regulate crypto asset staking and lending activities, which are definitely on the rise.”
Member of the European Parliament’s economic committee Stefan Berger, one of the proponents of the MiCA framework, also cited the fall of the FTX when advocating for the regulation of cryptocurrencies on November 9:
“The FTX case makes clear the dangers that come with a completely unregulated cryptocurrency market and unlicensed cryptocurrency exchanges. We still have a large number of crypto asset service providers whose concept is not comprehensible. MiCA addresses exactly this problem. With a Global MiCA, the FTX crash would not have happened.”
The ECB is currently carrying out the two-year research phase of its digital euro project, exploring the use of third-party validated online payments. Some officials within the EU expect to see legislation related to a digital euro in 2023.
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