European Union (EU) has reached a comprehensive set of rules to regulate the Wild West of the crypto market. Investor protection, environmental factors, and stablecoins are among the other items regulated by the legislation.
The framework, Regulation on Crypto-Assets (MiCA) and has made headlines in the past for a variety of reasons. The law was expedited due to the recent crypto market downturn, which has badly impacted investors and forced firms to liquidate, including crypto hedge fund Three Arrows Capital.
“Recent developments in this rapidly evolving sector have confirmed the need for an EU-wide regulation,” said French Finance Minister Bruno Le Maire.
European Union to hold companies more accountable
The new rules will increase corporate accountability for investor losses. The increased investor protection standards imposed on crypto enterprises will force them to take higher care of investors’ funds.
Following the TerraUSD crisis, lawmakers have become far warier of stablecoins. The European Union requires that stablecoin creators maintain a presence there and have adequate liquid assets.
The financial sector will have to disclose information on the environmental effects. The ECB has paid close attention to the energy impact of the crypto market.
This is only the beginning of a long series of European authorities’ investigations into the cryptocurrency market. Plans will be re-examined in the next 18 months.
ECB starts with the quarter-point rate hike
Meanwhile, the European Zone is experiencing high inflation again, surpassing 8.6% in June. As a result, the European Central Bank has proposed raising interest rates for the first time in 11 years. Christine Lagarde, ECB president, believes economic growth will be favorable, but many people are concerned about a recession.
The European Central Bank will meet in late July to discuss a possible rate increase. In September, it will meet again to decide whether or not to raise rates further. The governor of the Bank of Estonia, Madis Muller, said that the ECB should consider raising interest rates by a quarter-point every six months, with another 50 basis points added.
Many individuals around the globe are discovering that life is more complicated than it has been in the recent past. The Federal Reserve just raised interest rates by far as well for the first time in 22 years. Some people have claimed that this move will have catastrophic consequences.