The European Parliamentary Research Service (EPRS) has emphasized the critical importance of enhanced oversight from non-European Union (EU) regulators in order to foster greater stability and growth within the global cryptocurrency market.
With the Markets in Crypto-Assets Regulation (MiCA) Act on track for implementation by December 2024, a recent EPRS report underscores the necessity of establishing a more robust regulatory framework in non-EU jurisdictions.
The report underlines that the EU’s financial system and autonomy remain vulnerable to policy actions taken by non-EU countries, particularly in areas where MiCA is applicable.
The report raises significant concerns regarding potential repercussions on financial stability, the diminished attractiveness of the crypto market, and the mainstream adoption of stablecoins. These concerns underscore the urgency of addressing regulatory disparities on a global scale.
One of the key observations made in the report pertains to the United States, where a fragmented regulatory landscape prevails.
The presence of various state-level and federal stakeholders creates a complex web of regulations, indirectly impacting legal clarity and regulatory certainty within the crypto industry.
This fragmentation has the potential to hinder the growth and development of the sector.
The report also sheds light on the United Kingdom’s Financial Services and Markets Act, which, according to a study conducted for the European Parliament, is anticipated to diverge significantly from EU regulations concerning crypto-assets in the coming years.
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This divergence could introduce additional challenges for market participants operating in both the UK and the EU.
Highlighting the global scope of regulatory adaptation, the Malta Financial Services Authority (MFSA) initiated a public consultation on September 18th to align its crypto regulations with the forthcoming MiCA regulations.
The proposed revisions aim to harmonize rules governing exchanges, custodians, and portfolio managers with the EU’s MiCA regulations, reflecting the evolving international regulatory landscape.
In conclusion, the EPRS report underscores the critical need for international collaboration and alignment in cryptocurrency regulation.
As the EU moves forward with MiCA implementation, it becomes increasingly vital for non-EU jurisdictions to adopt compatible regulatory frameworks to ensure a stable, secure, and globally accessible cryptocurrency market.
The report serves as a timely reminder of the interconnected nature of the crypto industry and the importance of consistent regulatory standards to support its continued growth and maturation.
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