Saturday, December 10, 2022

Letter: Let’s hope the US follows Europe’s crypto lead

Over the past year, the EU crypto and blockchain market has been described as a “bubble”, a transient trend, and compared to the “wild west”, with commentators often referring to the absence of robust legislation or operating frameworks as evidence that the market may be illegal (“Boundless Crypto Markets Demonstrate Need for Global Rules”, Special Reports, 28 February).

There is no denying that the industry is at the beginning, but growing. To date, however, it has not had a credible framework within which to innovate. It’s all changing. Recently, the European Parliament’s Committee on Economic and Monetary Affairs voted on the draft markets in cryptocurrency regulation (Mica), which seeks to create a harmonized legal framework across the EU for cryptocurrencies. The draft regulation, already signed by EU member states, includes requirements for the issuance of cryptocurrencies and stable currencies and the provision of services in cryptocurrencies.

While we believe that there is room for refinement in the final text – including to distinguish between those cryptobatics service providers that only work with businesses as opposed to consumers – there is no doubt that this is a statement of intent that Europe is willing to to serve as an incubator of financial services. innovation, talent and competition. We hope that the US, which is moving relatively more slowly to realize the potential of crypto-assets, will look to the EU as an example as it continues to consider how to best regulate the industry.

We are encouraged to see industrial empowerment move beyond the private sector and individual enthusiasts, and towards government agendas in Europe. The more policy makers in the industry lean on guidance and legal frameworks, the faster the market will innovate, disrupt outdated financial services and demonstrate their value.

Susan Friedman
Head of Public Policy, Ripple
London EC2, UK

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