Digital asset regulations around the world have varied across jurisdictions, adding to the lack of regulatory clarity for virtual asset service providers. This may all change in the future, and a recent forum between regulators on both sides of the Atlantic may be a critical first step.
Regulators in the EU and the U.S. met at the Joint Financial Regulatory Forum to exchange their views on topics of mutual interest as part of their regular financial regulatory dialogue, a joint statement by the watchdogs revealed. One of the areas of interest was the regulation of digital assets and stablecoins, with the EU’s Markets in Crypto Assets (MiCA) framework taking center stage.
On the U.S. side, the participants included officials from the Treasury Department, the Federal Reserve System, the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), and the Securities and Exchange Commission (SEC), the de facto digital asset regulator.
Also represented was the Office of the Comptroller of the Currency (OCC), a regulator that has become increasingly influential in the Bitcoin space.
The EU contingent included representatives from the European Commission, the European Banking Authority, and the European Securities and Markets Authority.
The European Central Bank (ECB) was also represented in the forum. Led by President Christine Lagarde, the ECB has been anti-Bitcoin for years and has been pushing for a digital euro as a better alternative to digital assets and stablecoins. A week ago, the bank published a report criticizing proof-of-work and called on member countries to consider banning PoW digital assets due to climate concerns.
EU regulators briefed their U.S. counterparts on MiCA, a regulatory framework that EU lawmakers recently agreed on. Some of its stipulations include requiring stablecoin issuers to maintain ample reserves to meet redemption requests and giving the ESMA the authority to ban VASPs.
MiCA is expected to “put order in the Wild West of crypto assets and set clear rules for a harmonized market that will provide legal certainty for crypto asset issuers, guarantee equal rights for service providers and ensure high standards for consumers and investors.”
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