Christine Lagarde, the European Central Bank chief, wants more and broader regulations for cryptocurrencies. This comes at a moment in which FTX, one of the largest crypto exchanges in the world declared bankruptcy and ended up creating a crisis in the crypto industry. Meanwhile, Christine Lagarde wants to focus on broader regulations, even beyond MiCA.
Christine Lagarde Wants More Regulations for Cryptocurrencies
The European Central Bank is searching to impose broader regulations on the cryptocurrency market, at least in the coming years. The ECB wants to focus on the sustainability and reliability of the crypto industry. One of the upcoming regulations is related to MiCA, one of the largest initiatives to regulate the whole crypto market.
The MiCA bill is ready to be passed early next year. This will then enter into force as soon as 2024, creating a better environment for digital currencies to expand and grow. Companies will also have the possibility to operate in a fast-growing industry. However, this seems not to be enough for Christine Lagarde, that is already thinking about MiCA II.
On that matter, she mentioned:
“There will have to be a MiCA II. Europe aims to be a leader in that respect. We have to be able to offer that, otherwise, somebody else will take that place.”
This will be one of the largest but also most complete regulations having an impact on the crypto market. The goal would be to expand the regulations that have been outlined on MiCA I and create an even better ecosystem for companies to operate. Furthermore, MiCA II would also include other solutions and services linked to decentralized finance (DeFi) and more.
However, the new MiCA II regulation will not be ready in early 2023. Indeed, it would be necessary for policymakers to discuss the final details and bill.
Christine Lagarde has been many times criticised by the crypto market as she has been a strong supporter of strong regulations and centralized financial institutions. She is not only the chief of the European Central Bank, but she was also the IMF director before Kristalina Georgieva.
The crypto market has been multiple times criticized for the lack of regulations in the space. Bitcoin was released in 2009 and, since then, it attracted millions of investors from all over the world. Furthermore, multiple other virtual currencies were released to the market and attracted investors as well.
At the moment, there are two countries in the world that have made Bitcoin legal tender. These counties are El Salvador and the Central African Republic (CAR). Therefore, there are already jurisdictions that are creating different legal systems where digital currencies can be used legally by companies, investors, citizens and users.
Whether the MiCA I and II regulations will create a positive effect on the market remains to be seen. However, there will be new innovations that will take place in the crypto industry that regulators would not be able to adapt without new ways of approaching the matter.