Paris, 15 March 2022 – Yesterday, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) adopted its negotiating position on the MiCA (Markets in Crypto-assets) draft regulation published in September 2020 by the European Commission. A significant step in building this European Union’s regulatory framework, bringing us closer to the final text that will structure the French and European crypto-asset industry in the coming years.
The choice of a compromise solution: a relief to crypto-asset companies
For several weeks, strong negotiations took place in the European Parliament to rule on a proposal indirectly aiming to ban specific consensus protocols in Europe, such as Proof-of-work. However, disagreements within MEPs had already led to the postponement of the vote.
However, the Parliament preferred to opt for a compromise solution, thus treating the environmental impact of mining activities within the EU taxonomy (and not within MiCA) on an equal footing with other economic activities.
This approach, which Adan supported, is both the fairest and the most effective in the fight against the challenge of ecological transition. It encourages and strengthens the contribution of the crypto sector to the EU’s environmental objectives without hindering the development of the activity of our current and future champions.
Several concerns still need to be clarified to envisage the emergence of a strong sector in Europe
MiCA’s ambition is to create a protective framework adapted to the digital age that encourages the use of crypto-asset innovation to prepare the future of European finance that works for the people. However, the compromise resulting from the debates held in the European Parliament could miss its target. It thus undermines the credibility of the EU as a stronghold of the digital economy of tomorrow.
Threats are diverse
- Inadapted rules to the development in Europe of NFT (non-fungible tokens) and DeFi (decentralised finance) innovations.
- The introduction of prohibitive requirements for issuing euro stablecoins, modelled on banking regulations, that will reinforce the hegemony of dollar stablecoins (currently 99% of the market).
- The lack of progressiveness in the synchronised implementation of MiCA and other texts aimed at crypto players (transfers of crypto-assets, SFDR, SCG, etc.).
“The European Union risks shooting itself in the foot twice: by weakening its strategic autonomy further, and by undermining its monetary sovereignty,” warns Faustine Fleuret, president of the Association for the development of crypto-assets (Adan).
A train on the move, which there is still time to catch
Unlike Europe, the United States of America understands the scale of the challenge. As shown by the executed order released by President Joseph Biden. They understand the role that crypto-assets will play in perpetuating their strategy for a global political, economic and cultural leadership: an accelerator of their financial power, a consecration of their monetary sovereignty, a catalyst of their competitiveness, a new vector of American values. The New World could find in MiCA the opportunity to welcome the companies and talents that we will not have kept and fill the jobs that we will not have created. In the light of successive crises that have highlighted the EU’s dependence in several strategic areas and mistakes already made in abandoning specific vital industries (such as the cloud), missing crypto turns risks further weakening our positioning and our influence internationally.
The absolute necessity to deploy a stablecoin ecosystem by European players and to seize the opportunity of mining to improve our global energy efficiency, among other key issues, had already been addressed in Adan’s manifesto for the 2022 presidential candidates with concrete proposals.
Three watchwords must now guide the European trialogue: adaptation, proportionality, pragmatism. When the future of the crypto industry is at stake, let’s think about security, but also sovereignty and competitiveness.
Adan (Association for the Development of Digital Assets) is a non-profit bringing together and representing digital assets and blockchain professionals in France and Europe. Adan’s members cover a wide range of activities: digital asset markets, custody, payments, investment management, blockchain analysis tools, support for crypto/blockchain projects, IT security, etc. Adan’s mission is to promote the development of the crypto-assets industry in favour of a new digital economy.
Faustine Fleuret, President and CEO – [email protected]
Mélodie Ambroise, Director of Strategy and Institutional Relations – [email protected]