We believe that the comprehensive regulations passed by the European Parliament may well set the standard for many nations going forward. What concerns us today is will new EU rules help or hurt crypto? https://youtu.be/VuDufgdQlTI

1. By: www.ProfitableInvestingTips.com

2. Long dreaded regulations have begun to descend on the
world of cryptocurrencies. The most recent rules will
affect roughly a fifth of all crypto trading as it involves
the European Union where about $1.7 billion in
cryptocurrency transactions took place in 2022. In the
US there has been a fair amount of bickering over how
crypto regulation should proceed.

3. What tipped the scales toward more regulation in the
US and well as in the EU was the crypto bloodbath of
business failures, bankruptcies, fraud allegations, and
investors who lost large sums of money. President
Biden issued an executive order regarding the future
of US money and payment systems in early 2022
and US regulators are already applying current laws to
issues like Binance trading violations.

4. We believe that the comprehensive regulations passed
by the European Parliament may well set the standard
for many nations going forward. What concerns us
today is will new EU rules help or hurt crypto?

5. European Union Crypto Rules

6. Before deciding if new crypto regulations in the EU will
hurt or help, let’s take a look at the moving parts of the
new set of laws referred to as MiCA which stands for
Markets in Cryptoassets (MiCA) Regulation.

7. The first part of the new set of laws requires crypto
licensing of all cryptocurrency enterprises within the
EU. Anyone dealing in cryptocurrencies will need to be
registered with a regulatory authority in at least one
EU state before engaging in operations throughout the
EU.

8. This will put all crypto businesses directly under the
authority of the two EU financial watchdogs, the
European Banking Authority and the European
Securities and Markets Authority. An anti-money
laundering law passed separately from the MiCA
legislation requires that all crypto business identify
who their customers are. Anyone sending or receiving
crypto currencies as a business will need to report the
identities of all customers to the appropriate local
anti-money laundering authority!

10. Stablecoin Stability Will Be Regulated in the EU

11. Stablecoins that are backed by hard currencies like the
US dollar or euro are generally more secure than ones
protected by an algorithm than seeks to manipulate
trading of a token to adjust value.

12. Now in the EU, stablecoins that use a hard currency to
support their value will have to demonstrate sufficient
reserves of that hard currency to regulators similar to
how banks and insurance companies are required to
maintain and demonstrate sufficient reserves. In
addition, regulators will demand evidence of sound
management and governance from these entities. In
addition, anyone not pegged one-to-one to the euro
will have a €200 million daily trading cap.

13. EU Regulations Will Take Force Over Two Years

14. Fortunately, the bulk of the new EU laws do not go into
force tomorrow. The law will take its final form in June
and the first rules will start in July. The rules regarding
stablecoins will be a year after, July 2024 and the rules
for DeFi companies will start at the beginning of 2025.

15. Public Concerns and EU Crypto Laws

16. From what we can see, each aspect of the new EU MiCA
regulations answer a public concern that is currently
covered in the US by a regulatory agency as each of
them extends their reach into the crypto world. The
crypto world is generally OK with anonymity but
typically not with things like money laundering
interfering with otherwise legal and normal business
operations.

17. Those who have made money in crypto over the years are
generally OK with a fair amount of volatility but
usually not very happy to hear that folks like
Bankman-Fried were engaging in fraud as he used
their money for his own purposes! Folks who thought
their money was safe with a stablecoin were not
especially happy when an algorithm turned out to be
useless and all of their savings disappeared in a couple
of days.

18. To a degree the growing crypto world resembled the US
in the late 19th century with people like Vanderbilt and
Rockefeller who were called captains of industry by
some and robber barons by others. Regulations
reigned in the robber baron excesses and allowed
American business to thrive. We expect the same in a
regulated crypto world.

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