The European Central Bank is expected to issue a warning to Eurozone countries around the need to harmonise cryptocurrency regulation, the Financial Times has reported.
In a post by Finextra, the publication cited the recent passing of the MiCA regulation of the cryptocurrency market. However, the ECB said it remains concerned about a potential patchwork of national regulations emerging in the coming months – with full implementation of the regulation is set for 18 months after becoming law in 2023.
Through MiCA, the regulatory framework will protect investors and consumers, while ensuring financial stability and enabling innovation and growth.
Modulus CEO Richard Gardner said, “It makes sense that the ECB would want to prevent a collection of national laws on cryptocurrencies. For one thing, it could lead to operators shopping for favourable jurisdictions. Beyond that, it will create confusion for multinational operators, and it could create an uneven playing field within the EU. On the other hand, MiCA is so very far away. That it has come so far is a positive sign. However, eighteen months is an eternity in the crypto space.
“Now that banks and institutional money is in play, there are immediate needs. Financial institutions need to understand what they can do and how they can safely and legally participate. When you talk about institutional money, you could be talking about people’s pensions and retirements. What happens when a hack takes out hundreds of millions in assets overnight? Those are questions that require answers, and I don’t think, in many cases, that some countries will be willing to wait eighteen months to get them. Nor do I think you can blame them for wanting action.”
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