The European Parliamentary Research Service (EPRS) has issued a compelling call for non-European Union nations to bolster their regulatory oversight in the global cryptocurrency market.
Notably, this move comes as the Markets in Crypto-Assets Regulation (MiCA) Act progresses toward implementation by December 2024. Further, it underscores the need for a more rigorous regulatory framework outside the EU.
The Global Impact
One of the key points raised in the EPRS report is the potential impact on the global financial landscape. With the MiCA Act poised to exert significant influence, the report emphasizes that the EU’s financial system and autonomy could still be at risk due to policy actions taken by non-EU countries.
However, this issue deserves careful consideration as it carries implications for financial stability, market appeal, and the widespread adoption of stablecoins.
Challenges in the United States
The report draws attention to the regulatory landscape in the United States, which is characterized by fragmentation. Multiple state-level and federal stakeholders are involved. Indirectly, this will contribute to a lack of legal clarity and regulatory certainty. This complex environment poses challenges to the development and stability of crypto-assets.
Divergence in the United Kingdom
Another noteworthy point in the report is the situation in the United Kingdom. The UK’s Financial Services and Markets Act, along with a study commissioned by the European Parliament made a suggestion. They suggested a growing divergence between the UK and the EU in terms of how they identify and regulate crypto-assets.
This divergence is expected to become more pronounced in the coming years, which could have significant repercussions for the cryptocurrency market.
Notably, in a proactive move, the Malta Financial Services Authority (MFSA) initiated a public consultation. This was done on September 18th and in a bid to further revise its crypto regulations. This step further aims to align Malta’s regulatory framework with the forthcoming MiCA regulations from the EU.
Also, the proposed changes encompass rules governing exchanges, custodians, and portfolio managers. Further, it demonstrates Malta’s commitment to staying in line with evolving international standards.