A board member of the European Central Bank (ECB) has warned that the proposed crypto regulations in the European Union are not sufficient to address the risks associated with cryptocurrencies.
ECB’s McCaul Warns of EU’s Inadequate Crypto Regulation
Elizabeth McCaul, a member of the European Central Bank Supervisory Board, recently voiced her opinion on cryptocurrency regulation in a blog post published by the ECB.
McCaul pointed out that the regulations outlined in the Markets in Crypto-Assets (MiCA) bill, which is set to be voted on by the European Parliament later this month, are inadequate to effectively manage the risks associated with crypto assets. She stated:
While the new Basel standard and MiCA are important milestones, I am afraid they will not be sufficient on their own.
The ECB board member went on to say that crypto-asset service providers should be subject to stricter requirements and enhanced supervision, noting that “neither of the two is catered for by MiCA.” She also raised concerns about how the size of crypto-asset service providers is measured, pointing out that the collapsed crypto exchange FTX “would not have been classified as a significant CASP under MiCA because it did not reach the threshold of 15 million active users.” She continued:
In fact, Binance, which is the largest crypto player, is alleged to have between 28 million and 29 million active users worldwide, but would probably not even meet the threshold to be classified as significant in the EU.
McCaul further remarked on the need for new quantitative metrics for different types of businesses, such as trading volume for trading platforms or assets under custody for custodian businesses. Additionally, she proposed that thresholds be evaluated at the group level instead of the individual entity level due to the complexity of operations, and suggested that conflicts of interest must be identified not only within the group but also among affiliated entities.
What do you think about the ECB board member stating that the EU’s crypto rules are not enough? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
