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ECB Says Patchy EU Crypto Regulations Raise Risks

By  |  July 5, 2022
Crypto

The European Central Bank (ECB) is concerned about the various approaches towards crypto regulation found across EU member states, warning of legal uncertainty and harm to innovation. The Supranational authority has said it will urge National Authorities across the continent to harmonize their existing rules until the Markets in Crypto Asset Regulation (MiCA) becomes law and it is fully implemented.  

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    On Thursday, June 30, EU policymakers celebrated the agreement reached among the different institutions on the scope of the new crypto regulation that will govern this space in Europe for the years to come, MiCA. However, this new legislation will only be fully implemented 18 months after the text is published in the official journal of the European Union.

    Related: Defining Relevant Markets in the Crypto Economy

    This delay in the implementation of the law will generate a gap in the legal framework of around two years. During this time, European countries will need to apply their national laws, if they have any, or continue leaving the sector unregulated even though banks and FinTechs are clamoring for clarity. 

    The ECB is set to warn countries in the eurozone of the dangers of national regulators getting ahead of MiCA and proposing new rules that may affect the future harmonization of rules. The central bank is likely to raise the need for “harmonization” at a meeting of its supervisory board on Tuesday, July 5, according to the Financial Times. 

    European officials have been calling for a new “global agreement on crypto,” to protect investors and limit the environmental impact of bitcoin mining.” The aim of recent European focus on these assets has been for “no product to remain unregulated,” while highlighting the risks of these financial assets.