During an exchange at the Binance Blockchain Week in Paris on September 14, Changpeng “CZ” Zhao surrendered on the regulation of cryptocurrencies. Binance CEO confided that Europe’s Market in Crypto Assets (MiCA) regulatory framework could be extended globally.
CZ praises the MiCA regulation
It was during an interactive exchange that the CEO of Binance spoke about the thorny question of the regulation of crypto-currencies. For CZ, we could slide towards a universal standard applied by all regulators in the world. He thinks that the regulatory guidelines applied in the European regulatory framework for crypto assets are “fantastic”.
It should be noted that the MiCA guidelines are deemed to be demanding. They recommend that the cryptocurrency businesses only require one license. The latter will allow them to practice legally in the 27 countries of the European Union.
Furthermore, MiCA wants to limit access to stablecoins that are backed by the US dollar. CZ lamented this state of affairs:
“Projects are not embracing USD-based stablecoins which hold 75% of market liquidity.”
According to CZ, it would be clumsy to limit access to dollar-backed stablecoins because the effects would be negative. As the primary source of liquidity for the global crypto market, stablecoins could encourage investors execute large transactions with available cash. The restriction would only curb this activity.
The CEO of Binance also said to himself satisfied with the work of the French Minister of Technology in the edition of the MiCA regulations. He thinks that this action reflects France’s desire to work for the development of the cryptocurrency sector. CZ confided that a expansion of the Binance team in Paris was under study because the future of France in the crypto universe will be bright. Pro-employment and tax laws are strong arguments in favor of this possible expansion.
According to CZ:
“Paris is “probably… the financial center for crypto in Europe and more of the world”.
What does the European MiCA regulation provide?
The Crypto-Asset Market Regulation (MiCA) was adopted on June 30, 2022. It is considered the regulatory framework for stablecoins and crypto-asset providers on European soil. MiCA provides for stablecoins to be backed 1:1 by reserves with insolvency protection. This is not the case with algorithmic stablecoins like UST. Because of this, this currency is not allowed in the EU.
MiCA also plans a limitation of the issuance of stablecoins with commercial limitations. The regulation confides to the European Banking Authority (EBA) the regulation of stablecoins with more than 10 million users or 5 billion euros of tokens in circulation. It also sets a cap for the daily trading volume of stablecoins at €200 million.
This means that Tether (USDT) and USD Coin (USDC) which are backed by the dollar will be regulated by the EBA in Europe. These two stablecoins record €48.13 billion and €5.4 billion in daily trading volume respectively.
Additionally, crypto providers must register with the European Securities and Markets Authority and the EBA. With a single license for all players in crypto-currencies, issued by European regulators, the activity will thus be better regulated.
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Binance CEO CZ says EU MiCA framework could become global standard for cryptocurrency regulation
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