With the fast rise of the cryptocurrency business, authorities across the globe are finding methods to regulate the field, including the European Union (EU), which has introduced the Markets in Crypto Assets law to address the problem.
Peter Kerstens, the European Commission’s (EC) technical innovation and cybersecurity policy advisor, told CoinDesk on August 9 that the bill, if enacted, would make many reforms to the market, including severe regulations aimed at averting collapses like Terra and the treatment of non-fungible tokens (NFTs) as cryptocurrencies.
The EC’s advisor highlighted at the Korea Blockchain Week that the $40 billion collapse of the Terra ecosystem would not have occurred if the MiCA bill’s clauses requiring stablecoin projects to be more transparent and let client withdrawals on request had been in place.
Kerstens clarified: “We don’t want anyone to blow up the system or go bankrupt without consequence, as was recently the case with Terra (LUNA), which just vanished. (…) MiCA precludes the introduction of such schemes to the market.”
Similarly, the planned MiCA legislation does not exclude NFTs, as the official emphasised that EU lawmakers “have a very restricted view of what an NFT is.”
In other words, the proposed regulation would force issuers of NFTs to publish a whitepaper outlining the intricacies of the underlying protocol and ban making false or unduly optimistic statements about their future worth.
MiCA will be fully implemented by 2024
Aside from this, it should also be noted that the proposed regulations and procedures outlined in the MiCA bill are scheduled to become law in 2023 but are not likely to take full effect throughout the EU until 2024.
According to Finbold, the impending deadlines have caused the European Central Bank (ECB) president, Laura Noonan, to deliver a strong warning to Eurozone nations about the possible hazards of national regulators getting ahead of the law.