European Commission’s Ivan Keller emphasizes MiCA’s role in addressing Binance-like risks in the cryptocurrency landscape from next year.
The new European cryptocurrency rule, known as MiCA, will also reduce dangers that are comparable to those revealed by the Binance case when it goes into effect the following year. Ivan Keller, the European Commission’s policy officer, asserts this.
Official remarks regarding the Binance case and its relationship to the MiCA cryptocurrency regulation
Keller discussed the Binance case during his speech at the MoneyLIVE conference in Amsterdam yesterday.
Actually, the day before Keller’s keynote, the $4.3 billion settlement with the US Department of Justice was announced.
Ivan Keller works for the Directorate General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA), namely in the Securities Markets Unit. He is therefore the ideal person to discuss these topics with.
Keller cites the FTX case from last year and the Binance case from this year as “several unfortunate confirmations” that strong regulation of the cryptocurrency markets has been implemented.
He specifically emphasized that the new MiCA rule will reduce certain risks and, more importantly, give regulators more precise tools and authority to oversee these organizations.
Additionally, he said that the purpose of MiCA is to support market integrity, financial stability, and monetary sovereignty while simultaneously addressing consumer risks and fostering innovation.
It should be kept in mind that the USA does not currently have anything akin to the European Union’s MiCA, which is by far one of the first comprehensive legal frameworks on cryptocurrencies in the world.
USA vs. EU
As of right now, the world’s biggest cryptocurrency market is in the USA.
It’s no accident that FTX, a US exchange, experienced the largest cryptocurrency exchange failure.
Actually, and this has nothing to do with the EU’s MiCA, both of the cases Keller listed occurred in the USA.
In actuality, MiCA wasn’t officially certified until June of this year—months after FTX filed for bankruptcy. Moreover, it won’t be fully implemented until the following year.
But, the new European crypto rule is already simplifying matters for the police, courts, and government, but most importantly, it’s helping industry operators, who now know how to act.
From this vantage point, though, the USA is still in the dark regarding crypto legislation.
Let’s just say that Coinbase formally requested an explanation from the SEC, and the agency declined. In actuality, government organizations have no authority to enact laws pertaining to the subject or to define how the regulations should be applied. Rather, the US Parliament, or Congress, is in charge of passing laws, and the courts decide how the laws should be applied.
The benefit of EU
With this kind of structure, it becomes abundantly evident that the EU now enjoys a significant regulatory edge over the USA in the cryptocurrency space.
Nonetheless, it is important to note that the European market is substantially smaller than the American one, and that Switzerland—the primary hub for cryptocurrency in Europe—is not a member of the EU.
It is still impossible to envision a large-scale worldwide crypto operator migration from America to Europe at this time, in part because there are even more advantageous countries (like Dubai, for example).
But if, in the years to come, the EU’s position were to improve due in part to more lucid regulations, and if this were to continue in the USA, then eventually such a migration process might also start.
However, MiCA has not yet fully taken effect, all of its effects are unknown, and most importantly, after the US elections next year, things in the political landscape will likely settle down, possibly opening the door for them to approve crypto regulation as well. Actually, a measure already exists, but it hasn’t gotten enough support to pass yet.
Binance: the future of MiCA regulation and the European crypto markets
Ivan Keller further emphasized that the technological standards that will support the implementation of the MiCA regulations are being developed by the European Securities and Markets Authority and the European Banking Authority.
These forty technical standards are still in the development stage and are the subject of continuous public consultation.
As a result, there isn’t currently a finished framework that can be evaluated holistically, and it will probably take another few months to produce the final, comprehensive version of the regulatory and application framework.
The deadline is June 2024, although it’s possible that the last elements will also be revealed in the months that follow.
Therefore, it is still very difficult to determine the exact effects of this historic shift on the European cryptocurrency markets at this time, but the whole picture will soon become clear.
