Coinbase Global Inc. (NASDAQ:COIN) will reportedly delist all “unauthorized” stablecoins from its digital assets exchange in the European Economic Area by the end of this year. This could be a potential setback for digital tokens such as Tether’s USDT.
As widely reported, the European Union (EU) is expected to move forward with the implementation of updated rules that are meant to oversee the crypto-assets sector, known widely as MiCA, by the end of 2024.
The regulation of stablecoin issuers under MiCA had officially taken effect on June 30 of this year and requires them to hold relevant e-money authorizations in at least one member state.
Guidance for virtual currency exchanges and other firms offering services in the bloc is expected to go into effect starting from December 31, 2024.
During the past few years, major crypto exchanges such as Binance and Coinbase have been facing increasing regulatory pressure. While crypto and blockchain-based platforms now appear to be part of the future of finance, there’s also a need for more responsible regulatory approaches.
Regulatory frameworks like MiCA could aim to strike a balance between enabling innovation while ensuring the protection of individual consumers and businesses.
As covered last month, the European Union had approved MiCA, or Markets in Crypto Assets regulation.
MiCA aims to regulate all digital assets that are not deemed to be securities.
As for digital securities, the European Securities and Markets Authority (ESMA) has been conducting a consultation on the classification of crypto-assets as financial instruments.
ESMA accepted feedback until the end of April and expects to respond to the consultation by the end of 2024.
Tom Kiddle, co-founder of Palisade – a digital asset custody firm, spoke about his opinion on MiCA. Palisade is a regulated firm based in France.
Kiddle shared some of his comments recently at an event, the good and some of the challenges which need to be addressed.
As for MiCA, Kiddle believes that brining crypto under AML/KYC rules under the fifth money laundering directive (5MLD) was a good start but running a financial services firm involves more than just AML
Kiddle explained that MiCA is primarily about applying the traditional or widely-accepted standards expected of banks to the crypto world.
He pointed out that it may be argued that fiat and crypto performs perform the essential functions of money in most aspects. But everyone does not necessarily shared this opinion or perspective, and some might ask, “why shouldn’t crypto be afforded the same protections?”
As explained, the core of MiCA is built around “consumer protection” in several ways. Its primary message, ensuring customer safety, aligns with what “any legitimate company should prioritize anyway.”
