Markets in Crypto-Assets legislation or MiCA was approved by the European Parliament two weeks ago. The digital asset framework aims to provide harmonized rules for all European Member states – enabling innovation while providing sufficient protections for markets and investors.
At the same time, the US Securities and Exchange Commission (SEC) has been criticized by industry insiders for its “regulation by enforcement” approach to crypto and its assertion that all digital assets are securities, with the exception of Bitcoin.
Tokeny is a top European tokenization or digital security platform enabling issuers and firms to leverage blockchain technology for traditional assets. Euronext is a big investor in the firm. Tokeny is based in Luxembourg, a country that has already implemented clear regulations for using blockchain to issue digital securities. Tokeny foresees a future where digital securities trade on decentralized public blockchain ledgers, available to any eligible investor anywhere while being fully compliant.
In a recent blog post, Tokeny criticized the US environment while complimenting the EUs passing of the MiCA law. Tokeny said that the race is on to tokenized assets and support digital securities, and now the US is lagging behind the EU market.
“Despite the appointment of Gary Gensler, a blockchain-savvy Commissioner with a background in teaching blockchain, digital currencies, and financial technology at MIT, the SEC has maintained a conservative stance and resisted change. Under Gensler’s leadership, the SEC has maintained that the “law is clear,” suggesting that existing securities laws are appropriate for regulating digital assets. Consequently, issuers are required to adhere to the same rules as traditional securities, which is not always easy due to the decentralized nature of blockchain.”
Tokeny describes the SEC and the US legal environment as stifling innovation, “putting the country at a competitive disadvantage.”
Tokeny also points out that the EU also has established The Distributed Ledger Technology Pilot Regime, designed to provide a controlled environment for the testing and development of digital securities.
While the SEC may be an obstruction to digital asset innovation – Congress has fallen short as well, struggling to approve legislation that provides rules for stablecoins and digital securities, and perhaps digital assets that hold novel characteristics. As the House of Representatives is now controlled by Republicans expectations are high that digital asset legislation will be approved. Of course, once it heads to the Senate – all bets are off. So the US may be watching digital asset progress in Europe for a little while longer.
