There is a pressing need for strong regulatory frameworks to ensure the stability and integrity of the cryptocurrency industry.
Governor Villeroy de Galhau, leader of the Bank of France, has underscored the critical importance of international cooperation like MiCA 2 in regulating crypto conglomerates. His comments, delivered during a technology forum in Paris, shed light on the imperative need for collaborative efforts among nations to effectively address the challenges posed by these conglomerates.
In light of this, Villeroy further proposed the idea of reviewing recently adopted cryptographic legislation within the European Union, while emphasizing the potential need for comprehensive measures aimed at addressing this multifaceted problem.
On June 19, Bitcoin News tweeted that “Bank of #France Governor #Villeroy calls for regulating #crypto #conglomerates internationally.”
Insufficient Regulation: Is MiCA 2 a Solution?
Villeroy pointed out the inadequacy of only regulating individual entities within a single jurisdiction. He drew attention to the practices of US crypto companies that operate through different legal entities in multiple jurisdictions.
The abovementioned underlined the urgent need for global collaboration in the face of this complex challenge. While acknowledging the commendable progress of the European Union in the field of crypto regulation,
Villeroy offered insight into the possible need for a revised iteration of the Markets in Crypto Assets (MiCA 2) legislation. He aptly dubbed “MiCA 2,” revised legislation that would specifically address regulatory measures related to crypto conglomerates.
Significantly, the European Parliament granted approval to MiCA 2 in April this year, followed by the EU Council’s endorsement of the world-first comprehensive set of crypto regulations in May. This concerted effort is widely regarded as a substantial initiative to effectively regulate and supervise the cryptocurrency sector.
The introduction of MiCA 2 follows notable events, such as the unfortunate collapse of major players such as the cryptocurrency exchange, as well as the subsequent regulatory crackdown on industry leaders, including Binance.
The existing MiCA legislation is an important step towards regulating the crypto sector within the EU. However, its limitations require revision to embrace the evolving landscape of digital assets.
A potential ‘MiCA 2’ framework would aim to address regulatory gaps and provide a more comprehensive regulatory regime for emerging crypto-related activities.
The EU’s MiCA legislation represents an important step forward, but further revisions, such as ‘MiCA 2’, are required to address regulatory gaps.
By harmonizing regulations and promoting collaboration across jurisdictions, regulators can effectively safeguard the interests of investors and promote responsible development of the crypto industry.
Defense of ‘MiCA 2’
The existing MiCA framework has yet to cover specific activities, products, and services linked to digital assets. In particular, crypto lending, decentralized finance (DeFi), and non-fungible tokens (NFTs) remain outside the scope of its regulatory reach.
Consequently, notable figures in the arena of governance and policymaking, including Christine Lagarde, President of the European Central Bank (ECB), have advocated for the implementation of a secondary set of regulations, commonly known as “MiCA 2.”
Villeroy, speaking at a prominent technology forum in Paris, where an audience of startups, executives, and investors gathered, drew attention to the nascent nature of decentralized finance as a technological innovation.
Expressing the need to subject players using this technology for financial services to regulation, he stressed the importance of uniform rules designed to address comparable risks associated with such activities.
By Audy Castaneda
