Cryptocurrencies, vote for the new EU rules: what changes for investments
by Redazione PMI.it
written on 16 March 2022
Cryptocurrencies towards single regulation: the EU Parliament voted on the MiCA bill a few days after the US opening to digital currencies.
After opening the US to the digital dollar – on which President JoeBiden has mandated federal agencies to define a standardized regulatory framework to be developed in the medium term – the European Union is also opening up to a first form of regulation of the cryptocurrency market and digital currencies, with the MiCA (Markets in Crypto Asset) bill.
1. Cryptocurrencies: towards standard rules in the EU
1. Protocols and virtual currencies: what changes
2. The stablecoin threat to counter
1. More controls and transparency for digital finance
Cryptocurrencies: towards standard rules in the EU
Cryptocurrencies at a turning point
March 14, 2022 The European Parliament approved on March 14 the bill for a unitary legislative framework that regulates cryptocurrencies in all EU Member States, a process started in 2019 and which is becoming increasingly concrete. The provision (voted on March 14) does not contain the dreaded prohibitions on the use of virtual currencies operating on blockchains with PoW (proof-of-stake) protocols to process “crypto” transactions, such as Bitcoin and Ethereum do.
Therefore, the ban on energy-intensive cryptographic activities (those on the PoW protocol) was removed from the text of the law, following strong protests in this regard, however a compromise solution was chosen, namely that of taxonomies: cryptocurrencies “will be subject at minimum standards of environmental sustainability “.
Virtual protocols and currencies: what changes
The text of the law confirms the green light for mining and transactions for all current cryptocurrencies, even those that until a few days ago were at risk of “ban”, which are among the best known and most widespread on the market in terms of capitalization. No limitations even for blockchains that use a hybrid protocol – such as the PoH (proof-of-history) used by Solana – or the PoS (proof-of-stake).
The EU vote is therefore strategic and comes at a particular historical moment: a regulation of the crypto market both in the United States and in Europe, in fact, will make these assets more stable and attractive for traditional investors, reducing their strong volatility.
The stablecoin threat to counter
War in Ukraine, what the SWIFT blockade entails
February 28, 2022 An even more pressing need in the aftermath of the Russian invasion of Ukraine and the use of cryptocurrencies to avoid the financial sanctions inflicted on the supporters of the war. In a macro-finance framework, in reality, governments are not so much scared by the lack of transparency of decentralized finance but by the threat of stablecoins. These are cryptocurrencies anchored to traditional market assets, such as Tether, a virtual currency with a price linked to the trend of the dollar. Why are they scary? Because the digital Yuan, already issued by the Chinese central bank, and the digital ruble, to be issued by the Russian central bank by 2022, are also stablecoins.
More controls and transparency for digital finance
Cryptocurrencies & Co: boom in online trading offenses in Italy
March 15, 2022 And here we return to the MiCA bill, which now seeks to strengthen the regulation on digital finance in the EU and introduce a simplified licensing regime and a set of standard rules for all member countries, focusing on transparency requirements, authorizations and scrutiny by cryptocurrency service providers, consumer protections and measures against market offenses.
For the digital euro, we remind you, the ECB has started experimenting in 2021, with a wide-ranging roadmap that should lead to the issuance of the currency in a few years. The declared objective, however, is to push for a payment instrument and not an investment one, also having to dissolve fundamental issues such as the choice between centralized (potentially more efficient) or decentralized infrastructure (to allow transactions between end users).