The European Banking Authority suggests majors protect the global monetary policy. Central banks should ban stablecoins that may appear to be a threat. EBA generally considers big cryptocurrencies that can put banks’ monetary policy at risk.
The idea is to provide major financial regulators with enough power to stop the spread of so-called stablecoins to keep central banking, public investments, and economic policy under control. The special agency will be in charge of supervising major cryptocurrency issuers that are represented on the market of the EU in accordance with MiCA (crypto assets regulation policy).
Earlier, the EU Parliament supported the MiCA initiative. The majority voted in favor of regulations that introduce a new approach to control cryptocurrency issuers and operators across the European market.
The new approach will oblige stablecoin issuers to ensure suitable reserves as well as obtain specific licenses. What’s more, the new regulation suggests central banks will have enough tools to intervene with the asset-referenced tokes on the proposal.
If an issued stablecoin reaches more than 1 million daily transactions, it will require additional central bank issuance and intervention, if needed.
The idea behind new regulations is to create a financial environment where cryptocurrency can become even more relevant to be used as one of the main payment means across different fields and segments. Authorities believe they can create an ecosystem similar to private payment options complemented by central banks today. However, stablecoins must comply with all safety requirements as well as a so-called anti-money laundering law.
In simpler words, a cryptocurrency issuer will not be able to operate across the EU’s markets without specific permission. They will have to introduce their projects and wait until those projects are assessed for the concerns forwarded by the U.S. regulators.
The more ambitious the project is the more scrutiny it will get from EBA. Additionally, cryptocurrency issuers will meet a stricter approach to supervisory framework and authorization. As a result, the crypto ecosystem turns out to be not as unregulated as it initially was.
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