The bloc is close to approving regulations tailor-made for the nascent market.
Ripple international policy attorney Susan Friedman has asserted that the European Union is ahead of the United States in formulating clear rules for the nascent market, tapping it to become a “natural” crypto hub.
Politico disclosed this yesterday in a report indicating that while the U.S. appeared set on a broad crackdown on the developing market, the E.U. looks set on attracting crypto businesses. “And Europe is likely to get it [U.S. crypto business],” the Ripple counsel wrote in a tweet yesterday quoting the report.
“Europe is clearly outpacing the U.S. by establishing holistic regulatory frameworks for the cryptoasset industry,” making it “a natural hub for responsible participants going forward.”
— Susan Friedman (@ss_friedman) February 26, 2023
“We will have the best framework in the world in which companies can develop,” Stefan Berger, rapporteur of the E.U.’s Markets in Crypto Assets (MiCA) regulation, said per the report. “We will have everything that you need for a workable market.”
This pro-crypto statement comes as the bloc is close to the final vote on its regulations made from scratch for the nascent market. The E.U. deferred the vote until April as it faced difficulties translating MiCA into its 24 official languages. Notably, the progress comes despite negative crypto sentiment from the European Central Bank.
MiCA is not perfect, as has been pointed out by ECB President Christine Lagarde and some other industry participants. As highlighted by Lagarde, who is already suggesting a MiCA 2.0, it fails to cover decentralized finance, crypto lending, and staking. For industry participants, there are concerns over privacy as the draft appears to outlaw trading with privacy coins, in addition to what some perceive as potentially impractical anti-money laundering rules.
However, MiCA offers the prospect of significant progress toward clarity. The same can not be said about the U.S., where legislators remain undecided about whether or not they want to create new rules for the nascent market. In addition, regulators, particularly the U.S. Securities and Exchange Commission, have ramped up enforcement efforts by stretching decades-old laws designed for traditional finance.
Ripple finds itself among those bearing the brunt of the SEC’s crypto enforcement campaign and perceived overreach. For over two years, the blockchain payments company has been in a legal battle with the regulator over whether XRP, a token it created, is an unregistered security.
Recall that Ripple Chief Technology Officer David Schwartz recently indicated that the company could be tempted to shutter its U.S. operations. Meanwhile, as reported last November, the firm is looking to expand its business in Europe.