In the US, the newly formed Digital Assets Subcommittee of the House of Representatives met on Wednesday to hear financial experts and crypto celebrities discuss the regulation. On the other hand, MiCA regulation is on the agenda in the EU. Here are the details…
MiCA voting begins
European lawmakers are expected today to vote on the Crypto Asset Markets Act (MiCA), which will potentially usher in a new era of crypto regulation. Officials have discussed the finer points of the bill, openly expressing their support for a licensing regime, especially for crypto-asset service providers. The funds transfer provision attracted particular attention. It aims to support the monitoring of suspicious crypto-asset activities (money laundering and terrorist financing) across the European Union.
Transfers in excess of 1,000 euros ($1,097) from an unregulated or self-custody platform are expected to be restricted. If EU parliamentarians vote on the landmark bill, MiCA; It will introduce regulatory provisions for cryptoassets, consumer protections, and even environmental measures. Voting is expected today. As Cryptokoin.com reported, while a vote was originally planned to be held in February, the bill was postponed until April to allow additional preparation time for industry-related companies. First introduced in 2020, the bill is expected to enter into force 12 to 18 months after it has been added to the EU register.
In addition to a licensing regime, MiCA aims to establish a system that allows stablecoin issuers to hold sufficient reserves to support redemptions. While the regulation is seen by some as a way to limit the development potential of crypto, others still believe it can provide a model for competing jurisdictions, including the United States.
Cryptocurrencies are in the focus of regulators
On the other hand, cryptocurrencies were also on the agenda in the USA. The session titled “Understanding the Role of Stablecoins in Payments and the Need for Regulation” started with the speeches of Committee Chairman French Hill. During the session, Hill noted that the ongoing conflict between the US Securities and Exchange Commission (SEC) and the US Commodity Futures Trading Commission (CFTC) is unproductive. The representatives noted that conflicting views between the two regulators over whether stablecoins should be classified as investment contracts or as commodities has led to uncertainty over asset classifications.
The hearing came a day after the House Financial Services Committee met with SEC Chairman Gary Gensler. During the hearing, Gensler hinted that recent bank failures were linked to the crypto industry. But New York Department of Financial Services Superintendent Adrienne A. Harris disagreed with the idea at yesterday’s hearing, specifically in response to a question from California Representative Maxine Waters about the role of cryptocurrency in the banking crises.
Harris stated that the notion that Signature Bank’s failure is linked to crypto is false. According to Harris, the bank’s deposits came from a wide variety of depositors, and the failure was not due to cryptocurrency. He noted that the predominant portion of the bank’s deposit base comes from non-crypto industries, with only 20 percent being crypto-related. Committee members agreed that stablecoin regulation should be implemented quickly. However, there are bipartisan disagreements over which legislation should move forward.
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