By Alicia Maher
Amidst growing calls for stronger cryptocurrency regulations, the crypto market has done well in the last 12 months. With many coins doing 4x their opening prices at the beginning of the year, investors have earned a lot of returns on their profits. But many others have lost a lot of money on their investments while many had reasons to be said after their wallets got compromised.
The far-reaching impact of the successes and shortcomings of the crypto industry has prompted big brands, financial institutions, countries, and international organizations and agencies to weigh in on the merits, demerits, and adoption of cryptocurrencies as a financial system. The Council of the European Union (CoEU) has become the latest international body to join the discussion.
In its latest activity, the CoEU adopted two proposals on cryptocurrency and digital assets. The proposals captured the risks associated with cryptocurrencies and recommended frameworks for creating and enforcing regulations for protecting investors and reducing cyber crimes and threats perpetrated using crypto.
The CoEU has become one of the most important councils in Europe, and it regularly weighs in on matters relating to finance and security in the European Union, among others. The two proposals adopted yesterday are titled Digital Operational Resilience Act (DORA) and Regulation on Markets in Crypto Assets (MiCA) respectively.
A Unified Crypto Approach
Based on the proposals, the CoEU is seeking unified regulatory frameworks for crypto across Europe. The Council wants European countries to cooperate and harmonize efforts to make cryptocurrency investments safe and secure from fraud and illegal use. The Council also wants Europe to work together towards mitigating cyber threats that are becoming rampant especially in the US.
The DORA proposal covers frameworks for improving current ICT risk management strategies. The proposal seeks improved cybersecurity operations for safeguarding investors and other consumers from the risks associated with cyber applications. The framework will develop a unified reporting protocol for crypto cyber risks, threats, or attacks.
The MiCA proposal presents a working framework through which the EU can regulate the use of digital assets and encourage transparency from parties involved in crypto transactions. The MiCA also proposes a framework for making crypto advertisement and marketing operate within fair limits and present crypto investments in their true light.
At the end of its brief meeting, the Council noted that the final adoption of both proposals will depend on discussions with the European Parliament. Upon successful deliberations, both the Parliament and the CoEU will hold a formal adoption of the proposals.
Crypto Regulations May Appear Soon
Although the crypto industry is largely unregulated in many countries, governments keep a keen eye on it. But with the recent calls, white papers, and proposals for regulatory frameworks that have been tendered by international councils, agencies, and institutions, we may not be far off from seeing strong crypto regulations.
Whatever happens, countries would want a secure and safe digital asset platform that won’t risk their economies or undermine their currencies. Political and military power will also be a chief consideration while creating crypto regulations.