Binance Founder and CEO Changpeng “CZ” Zhao reportedly said the European Union’s proposed regulation of cryptocurrency is “fantastic,” though he does have some reservations about it.
Speaking Wednesday (Sept. 14) at the Binance Blockchain Week event in Paris, the crypto exchange leader said the proposed EU regulation called Market in Crypto Assets (MiCA) is “a little bit strict” on stablecoins, CoinDesk reported Wednesday (Sept. 14).
“The drafts are not adopting USD-based stablecoins, which have 75% of the liquidity in the market,” Zhao said at the event, per the report.
Nevertheless, Zhao added that he expected other jurisdictions outside the EU to copy MiCA, according to the report.
PYMNTS reported Aug. 23 that MiCA’s provisions overseeing stablecoins have been particularly controversial, most notably when it comes to a cap on the use and issuance of large, non-euro-denominated stablecoins.
Read more: A Primer on EU Stablecoin Regulations
That aside, one basic principle is not too dissimilar from U.S. proposals: Stablecoins will have to be backed 100% by reserves of fiat currency or highly liquid assets.
Stablecoin holders will have the right to redeem them, free of charge, from the issuer at any time, the European Council said.
European Central Bank President and stablecoin critic Christine Lagarde said, “That needs to be checked, supervised and regulated so that consumers and users of those devices can actually be guaranteed against potential misrepresentation.”
As PYMNTS reported Sept. 1, the text for MiCA could be ready in weeks.
Read more: EU Lawmaker Says MiCA Crypto Law Could Be Ready in October
The legislation requires crypto asset providers to register with regulators to offer services in the EU. The point of the law is to make parameters for how all the EU member nations regulate crypto, such as possibly making a common licensing regime, making it easier for companies operating in one member nation to roll out in the others.