European Central Bank or ECB’s President Christine Lagarde has urged the EU to quickly move into regulating cryptocurrency in a bid to prevent Russia from circumventing sanctions following the Ukraine invasion.
Vouching for faster approval of the proposed legislation known as Markets in Crypto-assets or MiCA, Lagarde said “There are always criminal ways to try to circumvent a prohibition, which is why it’s so critically important that MiCA is pushed through as quickly as possible so we have a regulatory framework.”
In a press briefing on 25 February 2022, the ECB’s top exec reiterated the same in the wake of growing concern that Russia might use cryptocurrencies to dodge penalties. Furthermore, the ECB head stated that the European Parliament is working on the MiCA and if received approval the lawmakers still need to have a consensus with members states in the coming months.
Under the new EU authority for anti-money laundering, a group of six member states including Germany, Italy, and Spain also want to include cryptocurrency under its supervision. The $2 trillion cryptocurrencies markets have exploded as companies and investors look to reap profits, yet it’s also opened a new front for law enforcement as widespread anonymity attracts criminal activities and rogue nations.
All about ECB’s Lagarde much touted MiCA Regulation
On 24 September 2020, the European Commission published its proposed regulation on Markets In Crypto Assets –MiCA, which forms part of Europe’s Digital Finance Strategy. The proposal aimed to create an innovation-friendly framework that does not hamper the growth of emerging technologies while ensuring a common approach across the Single Market and addressing the new risks crypto-assets pose.
MiCA encompasses cryptocurrencies like bitcoin and ether broadly, along with stablecoins. But not apply to digital currencies issued by central banks (CBDCs) nor crypto assets such as security tokens that might qualify as financial instruments like securities, deposits, treasury bills, or derivatives.
In the latest development, the European parliament has postponed its vote on the proposed regulatory package for crypto assets after a leaked draft invited a flurry of criticism for including a provision that sought to ban the usage of cryptocurrencies like bitcoin and ether in the European Union [EU] over energy concerns.
