ECB President Calls For Hastened Crypto Regulation In EU Following FTX Collapse
Christine Lagarde, the European Central Bank (ECB) head, has further expressed concerns about the sudden collapse of the Cryptocurrency exchange FTX. Hence, she proposed that cryptocurrency is under regulatory compliance in the European Union (EU).
In a statement earlier in the week while addressing the committee on Economic and Monetary matters, Christine stated that the EU has been progressive in its approach towards putting an end to the painful experience brought about by digital assets.
Using Facebook’s Libra as a case study of the ECB’s achievements and a plus in halting the involvement of some other bodies. She further stated that the EU has recently been proactive by coming up with practical regulatory laws to manage the crypto market.
Mostly, the ECB has made its recommendation known to the committee behind the Markets in Crypto Assets (MiCA) bill. The committee will ensure the MiCA policy addresses vital crypto sectors like consumer protection laws, environmental impact, business accountability, and anti-money laundering (AML).
The MiCA policy breeds confidence in knowing that the ECB’s control of the crypto market regulation is a step in the right direction. ECB further notes that a MiCA II will cover the supervision of the crypto market and its implementations.
Christine Lagarde stated as she tried to calm tensions and the state of social unrest. However, the MiCA laws are waiting to be unveiled pending an assessment and approval by the European Parliament economics committee.
Nevertheless, there is increasing confidence that the MiCA crypto regulation bill will be in effect by 2024.
The EU’s first agreement on MiCA went live six months ago. Then Rebecca Retting, a board member at the crypto-friendly bank Silvergate, rendered appraisals to clarify troubling issues concerning the Crypto space.
FTX Crisis And The Fall Of The Lehman Brothers
Meanwhile, Stefan Berger, a European Parliament economics committee member, compared the downturn of FTX (the third largest crypto exchange worldwide before its implosion) to the fall of the “Lehman Brothers” 2008 financial blunders.
Berger hinted that a similar scenario as it happened with the Lehman Brothers must be averted in the crypto Market, and that’s the sole purpose of MiCA. Users’ crypto assets are not to be taken for granted.
Hence crypto asset service providers must implement adequate internal risk management tools and equipment to secure users’ funds.
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