Recently, there has been a wide call for regulation improvement of cryptocurrency lending and staking. Also, regulators in the EU are calling on the union to quicken the MiCA rules.
However, there are reports that the ECB will issue a warning this week. The warning is to state regulators issuing their own rules neglecting the upcoming MiCA bill.
ECB Warns State Regulators Issuing Their Own Crypto Regulations
According to the Financial Times, the MiCA regulation will become law by 2023. Afterward, there will be a plan to implement the regulations for 18 months fully.
Meanwhile, the MiCA regulations aim to protect users’ interests in the crypto space. Also, it would regulate the usage of digital assets in the region.
According to reports, the supervisory board of the ECB will be meeting on July 5th. Hence, the warning will likely be made at the meeting.
Additionally, the warning aims to harmonize the different regulations before adopting the MiCA bill. The international body is unhappy with the different regulations issued by different countries.
Currently, European countries state that waiting for the MiCA Bill is difficult. One regulator asked if they should allow crypto firms to roam free without regulations.
The reason for the outcry is that MiCA is 18 months away from being implemented. As a result, they are confused about what to do until then.
Having Several National Laws Would Cause Confusion
As stated by FT news media, a national regulator in the EU noted that authorities need to provide clear regulations. This would remove the present confusion in the financial space.
Certain banks are uncertain of what activities they can carry out and those they cannot. Meanwhile, crypto firms have called for authorities to issue favorable regulations for the crypto space.
Particularly, Richard Gardner, CEO of the Modulus crypto platform, talked about the warning. Gardner noted that:
“It is normal for the ECB to want a unified crypto regulatory framework. Having several national laws on crypto would only result in confusion. Crypto operators would begin to look for jurisdictions with lesser regulations. As a result, there would be influx of crypto companies in those regions. The ECB aims to create an even playing field for crypto firms in the EU.”
Besides, Gardner believes the MiCA Bill is a positive development. Also, financial institutions need to understand how they can operate legally in the region.
Last month, Finbold reported that the ECB’s President called for regulating the DeFi industry. Christine Lagarde, the ECB president, noted that lending and staking activities were increasing in the space.