The adoption of the regulatory framework for cryptographic asset markets (MiCA) is still pending, but there are already some hiccups. The standard supposed to establish fairly clear crypto rules in the European Union (EU) has just reinstated a provision that was canceled a few days earlier. Certainly, the intentions of the MiCA are laudable, however its current version could be a brake on innovation. From now on, daily transactions in stablecoins backed by currencies other than the euro will be capped at 200 million euros. If ever the European Parliament maintains this provision, experts fear that the EU is falling hugely behind in digital payments.
The MiCA will limit the transactions of stablecoins backed by currencies other than the euro
While we are still awaiting the adoption of the regulatory framework for cryptographic asset markets (MiCA), certain provisions are already making people cringe. Since Wednesday, the European Union has cap transactions in stablecoins not backed by the euro at 200 million euros per day. A surprising decision, whereas so far, the intentions revealed in the MiCA seemed encouraging. With this new provision, the EU takes the risk of hampering innovation in the crypto market. Even more amazingly, this provision resurfaces just a week after staunch crypto advocates acclaimed its removal.
In other words, all stablecoins denominated in currencies other than the euro, such as the US dollar, have a daily exchange limit set at 200 million. According to our information, this is the French delegation to the EU who would be at the origin of this revision. This restriction is a real reversal of the situation. Because, a week ago, the technical negotiations on the MiCA ended.
A will of the powers of the EU?
Dimitris Psarrakis, in charge of European affairs for XReg Consulting, confirms the reinstatement of the provision limiting transactions in stablecoins backed by foreign currencies to 200 million euros. Questioned by our colleagues from The Block, he clarified that: “This effectively means that e-money tokens will have problems settling transactions from EU-based crypto-asset service providers, negatively affecting the EU market.”
The specialist goes further by citing the powers which, according to him, are at the origin of this reintegration. Germany, the Netherlands, Italy and finally France would therefore be the sponsors. They worked for the reintegration into the MiCA of the cap on stablecoin transactions with foreign currencies. Moreover, some anonymous sources insisted that all this was the work of the French authorities. In October, the Economic and Monetary Affairs Committee of the EU parliament will have to decide as a last resort.
With the capping of transactions in stablecoins backed by foreign currencies, the MiCA is alienating the crypto industry. This reversal of the vest sufficiently demonstrates the reluctance of certain countries vis-à-vis cryptocurrencies and digital transactions. It’s quite a step backwards that the EU has just taken, because it could lag behind in terms of innovations.
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