What's going on at the European Parliament? Over the past few weeks, there has been something of a fever around cryptocurrencies. During the examination of two texts, some MEPs have tabled a series of amendments to, in their view, "better" regulate the crypto sector.... One of the texts, which would require crypto service providers to check the identity and flows of all users, was adopted, prompting strong criticism from Web3 players. While nothing is definitive, these texts do raise a lot of questions. The Big Whale has taken a closer look!
First of all, what texts are we talking about? En l'occurrence de deux textes bien différents.- The first, is the European regulation "Markets in Crypto-Assets" (MiCA). The aim of this text is to harmonise legislation on cryptos across the European Union. One of the main proposals in the regulation is to create a European Digital Asset Service Provider (EDASP) status on the model of what France did in 2019 with the Pacte law. Around 30 companies are registered with the Autorité des marchés financiers (AMF) as PSANs. - The second, is the new EU anti-money laundering directive. Presented on 21 July 2021, the directive (which, unlike a regulation, must be transposed into national law) includes several provisions and in particular better control of transfers of funds (cash) within the EU. Initially, the directive did not cover cryptocurrencies, but some MEPs wanted to add them.
What are these amendments? - The amendment concerning MiCA was tabled by the Green Group in the Mid-March. It provided for a ban in the EU on all crypto-assets based on the "Proof of Work" consensus algorithm. If we follow the amendment, Bitcoin, Ethereum (which is however in the process of migrating to "proof of stake") and all other cryptos using this energy-intensive mechanism, should have been banned from Europe... The amendment was finally rejected in extremis (32 votes against and 24 votes) by the European Parliament's Committee on Economic and Monetary Affairs (ECON).
Est-il pour autant si grave? Certainly, the text as it stands requires service providers to list all transactions. A "folly", according to the companies interviewed by The Big Whale. But the text is still a long way from being definitively adopted.
This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.
