European Commission Commissioner for Financial Services, Financial Stability, and Capital Markets Union Mairead McGuinness, says the United States needs to pick up the pace and create bespoke rules for digital assets or crypto assets.
The European Union is moving forward with its Markets in Crypto Assets (MiCA) directive that aims to create rules for digital assets. MiCA recognizes that adopting blockchain technology will lead to more economic growth while acknowledging a need for a “high level of protection of retail holders and market integrity in crypto-asset markets.”
McGuinness, speaking to the FT while in Washington DC, meeting with Fintech supporters like Representative Patrick McHenry and Senator Kirsten Gillibrand, she stated:
“We do need to see other players also legislating … perhaps differently, but with the same objective … We need to look at global regulation of crypto.”
Adding:
“There could be – in time, if it grows – financial stability problems. There also are investor issues around a lack of certainty.”
Mark Foster, EU Policy Lead for the Brussels-based Crypto Council, told CI in an email that the European Union is trying to take the “pole position” in the global race to regulate crypto, and the Commissioner is trying to push the US to move faster and follow the EU’s lead:
“Crypto is a global technology with global implications. The EU wanted to be a first mover and set the standard. Now, it is looking for global buy-in. If others go slower or put in place more agile regulations, they could find themselves on an unintended backfoot. Recent FSB [Financial Stability Board] recommendations form a solid basis for enhancing dialogue to achieve more consistent global standards. Commissioner McGuinness is also right to underscore the same objectives globally whilst recognizing the road to get there might be different in respective jurisdictions.”
Foster said that it is positive that Commissioner McGuinness is seeking international cooperation along the lines of global crypto rules, something the Crypto Council has been advocating for, on behalf of their members.
“There are some concerns about the EU’s approach within MiCA that puts an artificial and arbitrary limit/cap on euro and non-euro denominated stablecoins,” stated Foster. “We think this will have the unintended consequence of discouraging investment and activity in digital assets. But, it’s not too late. We encourage the EU to work with the FSB and other jurisdictions to ensure this particular provision of MiCA doesn’t have a chilling effect on the growth and innovation delivered by digital asset providers.”
Meanwhile, it is widely understood that several members of Congress are working on digital asset legislation. Congressman McHenry is one of these members. If the Republicans win back the House in the midterms, McHenry will take over leadership of the House Committee on Financial Services and is expected to move quickly to introduce crypto legislation.