Posted 10 months ago | by Ben Armstrong

EU Sees Regulations for Digital Assets as Positive

Recently, two unofficial EU documents which had originally been scheduled to be published this September were leaked. They disclosed a plan by the European Union to regulate digital assets – including blockchain and crypto.

According to the European Commission, the new crypto framework will encourage the application of blockchain in general, with the aim to facilitate non-cash payment and cross-border transactions. It is planned to be enacted sometime in the next five years.

This plan is announced in the context of the pandemic and is designed to urge people to switch to digital payments. Cash was still the dominant payment method among European nations, making up 78% of all transactions in the region – although these statistics may be inaccurate.

The EU is Working on Wider Regulations

The documents claimed that an inclusive framework for blockchain, Distributed Ledger Technology (DLT) and crypto is being drafted to replace current vague and inefficient regulations.

By 2024, the new proposed law, so-called the EU Regulation on Markets in Crypto Assets (MiCA), would come into effect and enhance the role of digital currencies and payments in financial sector. At the same time, the draft also pointed out inherent issues and risks of the technology.

To create a united legal environment that harmonizes crypto, the rules will consolidate the definitions for blockchain-related terms, for example, what is e-money or what are defined as an asset-backed token.

More Digital Assets Could Hit the Markets

With the new regs, many types of crypto assets, including crypto or stablecoins are facing an opportunity to become compliant with EU regs, which may bring new assets to the marketplace.

However, the EU may decide to attempt to create regulations for actual crypto platforms – like Bitcoin. Not only is this basically impossible – it would be terrible for crypto businesses in the EU. Like anything in the digital economy, a decentralized currency doesn't need a government to exist.

If the EU goes the way of China – and decides that it will only allow digital payment platforms that it can control to be used legally – it will destroy its competitiveness in the digital economy. It also may push nations like Switzerland further away from the EU – which is bad for the EU in the medium-term.

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About Ben Armstrong

ef4f73e9ddeb61becab57469962fa946?s=90&d=blank&r=g EU Sees Regulations for Digital Assets as PositiveBen Armstrong is a YouTuber, podcaster, crypto enthusiast, & creator of BitBoyCrypto.com. Better known as BitBoy Crypto, he works hard to educate and inform the crypto community.

Ben has been involved with the world of cryptocurrency since 2012 when he first invested in Bitcoin. He used Charlie Shrem's BitInstant & lost Bitcoin in the Mt. Gox hack.

In 2018, Ben decided to go "full-time crypto" and focus all of his time and energy into expanding the reach of crypto.

If you have any questions or comments please feel free to email him at BitBoy@BitBoyCrypto.com or contact him on Twitter @BitBoy_Crypto.