In June, Christine Lagarde stated that a potential MiCA II framework “should regulate the activities of crypto-asset staking and lending, which are definitely increasing.” ECB president reiterates calls for “MiCA II” in response to FTX collapse.
In the wake of the collapse of crypto exchange FTX, ECB president Christine Lagarde has once again referred to regulation and supervision of cryptocurrencies as an “absolute necessity” for the EU.
Lagarde cited Facebook’s Libra as an example of the ECB’s involvement, which was “helpful to stop some of the players” from engaging with crypto firms at a hearing on November 28 of the Committee on Economic and Monetary Affairs of the European Parliament. However, she stated that the situation with FTX, which involved crypto assets rather than stablecoins, was more about the exchange’s “stability and reliability” and that the ECB needed to act as a global regulator to address the growing interest in digital assets.
The ECB president stated, “At least Europe is ahead of the pack on the road to crypto regulation.”However, as I previously stated, it is a first step in the right direction.This is not it; a MiCA II, which encompasses a broader scope of what it aims to regulate and supervise, is essential.
Following legal and linguistic checks by EU lawmakers, the Markets in Crypto Assets bill, or MiCA, is awaiting final approval. In October, trialogue negotiations between the EU Council, the European Commission, and the European Parliament resulted in the acceptance of the MiCA framework by the economics committee of the European Parliament. The policy is anticipated to take effect in 2024, according to many.
In June, Lagarde talked about MiCA II, which is probably more legislation that builds on the work lawmakers did on the first bill. The framework “should regulate the activities of crypto-asset staking and lending, which are definitely increasing,” according to the ECB president at the time.
Stefan Berger, a member of the economics committee of the European Parliament and one of the backers of the MiCA framework, also mentioned FTX’s demise in support of crypto regulation on November 9:
The FTX case highlights the dangers posed by cryptocurrency exchanges operating without licenses and a crypto market that is completely unregulated. There are still a lot of crypto asset service providers whose ideas are hard to grasp. MiCA specifically addresses this issue. The FTX crash would not have occurred if there had been a global MiCA.
The ECB is currently in the second phase of its digital euro project, a two-year investigation into the use of validated online payments. Legislation regarding a digital euro is anticipated by some EU officials in 2023.