The development of the crypto sector pushes regulators to set up different strategies to control it. The advantages of cryptocurrencies are no longer to be presented. However, the risks are also visible and this is one of the main reasons for the speech of François Villeroy de Galhau, the Governor of the French Central Bank.
Governor of the Central Bank of France warns against overly complex crypto regulations
The more time passes, the more digital assets attract the attention of the general public. Despite all the probabilities of gain they offer, it is the consequences that particularly worry regulators. Monday, Luis de Guindo, the vice-president of the ECB said euro zone inflation is getting higher and higher as growth weakens.
This statement follows the warning from the European Securities and Markets Authority (ESMA). Indeed, the main regulator of property values in the European Union warned in May of soaring inflation. The latter said that the rise in consumer prices could push retail traders towards cryptocurrencies.
Thus, during the conference on digital finance held on Tuesday in Paris, François Villeroy de Galhau spoke about the regulation of crypto assets. According to him, regulators should be vigilant and attentive before making decisions. Presumably, the adoption of contradictory or late regulations may not be enough to protect investors. It might also be insufficient to prevent money laundering.
A bill on the regulation of cryptocurrency markets?
In September 2020, the European Commission introduced the Crypto Asset Markets Regulation (MiCA) Bill. This is part of its digital finance strategy to bring together all players in the crypto sector in the EU under a single regulatory framework.
On June 30, the Council and the European Parliament reached a provisional agreement on the MiCA bill. However, the latter will only be implemented in 2024. In August this year, the European Central Bank (ECB) presented its plan for the harmonization of the regulatory framework in the EU.
According to the regulator, there is not yet a harmonized regulatory framework in the EU. Therefore, this plan will govern crypto activities and services in the area in order to avoid the creation of unequal playing fields. Moreover, this is becoming a necessity since many banks think of offering crypto products and services.
L’inflation is intensifying and regulators are on the alert. Indeed, there is a good chance that investors will turn to crypto assets. For this reason, François Villeroy de Galhau thinks it is essential to make the right decisions at the right time.
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