While the European Union deploys its historic markets within the framework of Crypto-Asets (Mica), the main promise of the law of a unified market is already under pressure.
In the last episode of Size of the size of an byteCointtelegraph explored if the mica could live up to its promise.
Promises vs reality
The regulations were designed to simplify the operations of cryptographic companies by introducing a unique license system in the 27 Member States. Once authorized in a country, companies would be able to “pass” their services through the block without navigating in a patchwork of local rules.
But less than a year after the implementation, national regulators in countries like France, Italy and Austria express concerns that passports could encourage companies to choose jurisdictions with lighter surveillance, a practice known as regulatory arbitration.
“Regulatory competition in Europe is not new,” said Jerome Castille, responsible for compliance and regulatory affairs for Europe in Coinshares.
“We have seen detailed trading platforms flock to Cyprus and Malta under Mifid. With Mica, the wait was that this time, it would be different. But again, we see in a way the companies choose the jurisdictions considered to be more accommodating. And if people start to think that all licenses are not equal, then the whole single market promise disappears. ”
The question, according to Castille, is not a lack of rules but a lack of coherent implementation. “Europe already has a very high level of protection of investors and probably the highest in the world,” he said.
“The real problem at the moment is to make sure that the mica is fully implemented. Without formal advice, national regulators make their own appeal. This is where divergence or even regulatory arbitration come from. If we get the right problem, the market becomes both safe and attractive for global players. If we don’t, innovation will look elsewhere. ”
In relation: Bitgo guarantees a license to launch regulated crypto trading in Europe
Small fish big pond
For small businesses, deployment is particularly difficult. Marina Markezic, executive director of the European Crypto Initiative, noted that the differences in capacity between regulators and the pace of new rules could release startups from the market.
“It is very intense to comply in a very short time,” she said.
“For older children, having a single access to the entire European Union market is really positive. But unfortunately, for small businesses, it is a very big burden and they may not survive this process.”
While Mica was the European attempt to direct cryptographic regulations, its success will depend on the question of whether the rules are applied uniformly through the block.
As Markezic added, “there are 27 different national authorities supervising the same regulation. Some are larger, some smaller, some more experienced, some less. It is really a test for Europe to see if we are able to supervise in a coherent way. ”
Listen to the full episode of Size of the size of an byte For the full interview on the Podcasts page of Cointtelegraph, Apple or Spotify podcasts. And don’t forget to consult the full range of Cointelegraph of other shows!
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