A leaked draft of a soon to be official European Commission document reveals the EC’s future intentions to regulate the cryptocurrency market. The draft also reveals that the commission will be aiming at controlling the introduction of new crypto assets.
The draft of 168 pages is said to be released by the end of the month. However, once the decree is approved, if ever, we would have to wait until 2022 for the recommendations to be added to the official EU laws.
One of the major points that the leak revealed was the intention in bringing Markets in Crypto-assets (MiCA) for digital assets. This goes in much the same direction as the Markets in Financial Instruments Directive (MiFID), a European securities market regulation scheme, that is well known to FX brokers throughout the European Union.
As is with MiFID, the MiCA will shed light on the still hard-to-clarify digital coins.
Another important point that was covered in the draft was the overall concern around stablecoins, which are, essentially, used to mimic the value of fiat currencies. In fact, the proposal is much more interested in their (stablecoins) regulations, than the rest of the digital currencies.
The distress surrounding the stablecoins predicament might be partly caused by Facebook’s Libra initiative. Libra is technically a cryptocurrency pegged to various fiat currencies, which is the current definition of a stablecoin.
There is much to be expected from this, while the current EU stand on cryptocurrencies as a whole is on the positive side, as many nations are on a continuous quest to centralisation.
