- The Governor of the Bank of France has drummed his support for the MiCA 2 regulation.
- The new regulation will bridge various regulatory gaps.
In a speech delivered at the Vivatech technology conference in Paris, Francois Villeroy de Galhau, the Governor of the Bank of France, emphasized the necessity of international collaboration to regulate crypto conglomerates. The Bank of France Governor stressed that it is insufficient to regulate individual entities within a single jurisdiction, using U.S. crypto companies as an example. These companies often operate through multiple legal entities in various jurisdictions, highlighting the need for a coordinated global approach to regulation.
Bank of France governor wants MiCA 2 regulation
While acknowledging that the European Union (EU) has made significant strides in crypto regulation, Villeroy proposed the development of an updated version of the Markets in Crypto Assets (MiCA) legislation, referred to as “MiCA 2.” The European Parliament approved MiCA in April, and the EU Council subsequently endorsed it in May. This comprehensive regulatory package represents the first global attempt to regulate and supervise the crypto sector.
The emergence of major players like FTX, a failed cryptocurrency exchange, and the regulatory crackdown on industry leader Binance in the United States, prompted the need for stricter oversight. However, certain activities, products, and services related to digital assets, such as crypto lending, decentralized finance (defi), and non-fungible tokens (NFTs), currently fall outside the scope of MiCA.
To address these gaps, policymakers, including the President of the European Central Bank (ECB), Christine Lagarde, have called for the adoption of a ‘MiCA 2’ framework. The Bank of France echoed these sentiments, asserting that actors utilizing decentralized finance and other emerging technologies in the financial services sector must be subject to appropriate regulation.
The Bank of France Governor’s remarks underscore the potential risks associated with unregulated crypto conglomerates. As the crypto industry continues to evolve and gain prominence, it becomes increasingly crucial to establish comprehensive oversight mechanisms. By collaborating internationally, regulators can develop a unified framework that sets consistent rules and safeguards against illicit activities within the crypto ecosystem.
The new regulation will bridge several regulatory gaps
The challenges faced in regulating crypto conglomerates arise from the complex nature of their operations, which often span multiple jurisdictions. With diverse legal entities involved, a fragmented approach to regulation becomes ineffective. International cooperation becomes essential to ensure consistent oversight, streamline regulatory processes, and promote transparency across borders.
The existing MiCA legislation is an important step towards regulating the crypto sector within the EU. However, its limitations necessitate a revision to encompass the evolving landscape of digital assets. A potential ‘MiCA 2’ framework would aim to address the regulatory gaps and provide a more comprehensive regulatory regime for emerging crypto-related activities.
The importance of regulation in the crypto space cannot be understated. It not only protects investors and consumers but also fosters trust and stability in the market. By establishing clear rules and standards, regulators can mitigate the risks associated with money laundering, fraud, and market manipulation, thereby ensuring the sustainable growth of the crypto industry.
The Bank of France Governor’s call for international cooperation to regulate crypto conglomerates highlights the need for a unified approach to oversight in the evolving digital asset landscape. The EU’s MiCA legislation represents a significant step forward, but further revisions, such as ‘MiCA 2,’ are required to address the regulatory gaps. By harmonizing regulations and promoting collaboration among jurisdictions, regulators can effectively safeguard the interests of investors and promote the responsible development of the crypto industry.
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.