Paris, March 15, 2022 – Yesterday, the Economic and Monetary Affairs Committee (ECON) of the European Parliament voted its compromise version of the draft MiCA (Markets in crypto-assets) regulation published in September 2020 by the European Commission. A major step in the process of building community regulations, bringing us closer to the final text that will structure the French and European crypto-asset industry in the coming years.
Choosing a compromise solution: a victory for crypto-asset companies
For several weeks, heated negotiations were held in the European Parliament in order to decide on a proposal aimed indirectly at banning certain consensus protocols, such as Proof-of-work, in Europe. Disagreements had already led to a postponement of the vote.
However, Parliament preferred to opt for a compromise solution today, thus treating the environmental impact of mining activities within the European taxonomy (and not within the MiCA regulation), on an equal footing with other economic activities.
This approach, which was supported by Adan, is both the fairest and the most effective in the fight against the challenge of ecological transition. It encourages and strengthens the contribution of the crypto sector to the environmental objectives of the Union without hindering the development of the activity of our current and future champions.
Several fears still to be clarified to envisage the emergence of a strong sector in Europe
MiCA’s ambition is to create a protective framework, adapted to the digital age and which encourages the use of crypto-asset innovation in order to prepare the future of European finance at the service of citizens. However, the compromise resulting from the debates held in the European Parliament suggests a text that misses its target, and thereby undermines the credibility of the European Union as a stronghold of the digital economy of tomorrow.
The concerns are protean.
- Rules unsuited to the development in Europe of NFT (non-fungible tokens) and DeFi (decentralized finance) innovations.
- The introduction of prohibitive requirements for the issuance of euro stablecoins, modeled on banking regulations, which will consolidate the hegemony of dollar stablecoins (now 99% of the market).
- The lack of progressiveness in the synchronized entry into application of MiCA and other texts targeting crypto players (transfers of crypto-assets, SFDR, SCG, etc.).
“The European Union risks shooting itself twice in the foot: one to further weaken its strategic autonomy, the other to undermine its monetary sovereignty” warns Faustine Fleuret, president of the Association for the Development of Digital Assets.
A moving train, that there is still time to take
Unlike Europe, the United States has understood the magnitude of the issue. Witness the guidelines issued by President Joseph Biden last week. Understand the role that crypto-assets will play to perpetuate their strategy of global political, economic and cultural domination: accelerator of their financial power, consecration of their monetary sovereignty, catalyst of their competitiveness, new vector of American values. The New World could find in MiCA the opportunity to welcome companies and talents that we have not kept, and to fill the jobs that we have not created. In the light of successive crises that have highlighted the dependence of the European Union in several strategic areas, and the mistakes already made by abandoning certain key industries (such as the cloud), missing the crypto shift risks further weakening our positioning and our influence internationally.
Whether it’s the absolute necessity of deploying a euro stablecoin ecosystem by European players, or seizing the mining opportunity to improve our overall energy efficiency, Adan’s manifesto for candidates for the 2022 presidential election make concrete proposals.
Three watchwords must now guide the European trilogue: adaptation, proportionality, pragmatism. At a time when MiCA is playing the future of the crypto industry, let’s think about security, but also sovereignty and competitiveness.
Adan (Association for the development of digital assets) brings together professionals in digital assets and blockchain technologies in France and Europe. Its members make up a wide range of activities: markets, custody, payments, management, analysis tools, support for projects and users and IT security. Adan aims to unite the digital asset industry and promote its development in the service of a new digital economy. To do this, the Association has technical and regulatory expertise in the world of digital assets and maintains close dialogue with public authorities and market associations.
Faustine Fleuret, President and Managing Director – [email protected]
Mélodie Ambroise, Strategy and Institutional Relations Director – [email protected]
Website : https://adan.eu
Twitter : @adan_asso