The regulators and experts agreed that there needs to be a careful balance between protecting investors while also allowing the crypto industry to grow.
The Paris Blockchain Week 2023
The annual conference that brings together industry regulators, industry experts, enthusiasts, and policymakers was held this week. The event features panel discussions, debates, speeches, workshops, and networking sessions.
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It is a great platform for those participating and attending to discuss the latest trends and developments in the blockchain industry.
People share knowledge, learn, and collaborate on future endeavors with respect to the blockchain industry.
This time representatives from regulatory bodies and various industries discussed the implications and potential effects of EU’s Markets in Crypto-Assets (MiCA) regulation.
How is the EU Regulating Crypto?
During the event, there was a panel discussion specifically targeted at how the EU was regulating the crypto industry.
The discussion focused on the upcoming Markets in Crypto-Assets (MiCA) regulation that is scheduled to be implemented in 2024.
The MiCA regulation is 400 pages long governing guidelines for digital assets and cryptocurrencies. The regulatory framework has garnered significant attention and has been a point of discussion across Europe.
Gundars Ostrovskis, who leads the Digital Finance Unit of the European Commission, shared his knowledge about the development of MiCA regulations.
He emphasized that the proposed legislation would provide regulatory certainty, which is crucial for businesses to make strategic decisions and ensure market integrity.
Additionally, he stated that MiCA would be beneficial for companies and users in the cryptocurrency industry by offering protection to customers.
MiCA has been in the works for a few years and has been discussed with different countries and players in the crypto industry.
He emphasized that the adoption of MiCA would necessitate changes in countries where regulations for cryptocurrencies are already in place.
The Panel Discussion
According to Janet Ho, who heads the EU policy at Chainalysis, the success of MiCA will depend on various factors.
She suggested that to achieve success, stakeholders must have a thorough understanding of the requirements of the regulation.
Additionally, they must provide constructive feedback to improve certain aspects of the regulatory framework. Legislation is an ongoing process and is subject to review and improvement.
Ho proposed that the European Commission should evaluate the execution of obligations.
Additionally, he recommended assessing responses from overseas government regulators and market participants, and the initial effects of MiCA.
Hubert de Vauplane, who advises lawmakers on topics ranging from fintech to economics, and digital payments, shared his insights during the panel discussion.
De Vauplane is one of the partners at the Paris office of Kramer Levin Naftalis & Frankel which is a renowned American law firm.
De Vauplane expressed his concern over the impact of the guidelines on crypto regulations that are already in place in certain EU countries.
He emphasized that some countries have their own local regulations, such as France, which could potentially be completely replaced by MiCA.
De Vauplane mentioned that the MiCA regulation may not cover newer industry trends like NFTs and DeFi products and platforms. This will possibly leave NFTs and DeFi under the purview of the laws of the respective countries.
This essentially means that local regulations may not have a space in such scenarios where MiCA already provides the definition of digital assets.
Nadia Filali, the blockchain program director of Caisse des Dépôts Group, emphasized the significance of collaboration between government bodies, regulators, and industry stakeholders.
While citing France as a reference point she expressed the importance of the development of regulations. She communicated how regulations can foster innovation and improve the adoption of technology.
The Final Vote
The Commission has achieved a good balance in regulating specific aspects of the crypto network while leaving other facets open to development without regulatory constraints.
This approach would provide a solid regulatory framework for various activities in the crypto ecology.
However, a final decision on the MiCA regulation is slated to take place next month, after weighing the pros and cons.