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‘US has left a vacuum that other countries are eager to fill’: Coinbase

While the U.S. government opts for “regulation by enforcement,” other countries are fostering “vibrant” crypto ecosystems due to progressive regulation, argues Coinbase’s Daniel Seifert.

With Coinbase seemingly on the verge of a court battle with the Securities and Exchange Commission (SEC), the firm has emphasized that the U.S. government’s hawkish approach to crypto regulation has “left a vacuum that other countries are eager to fill.’

The SEC issued Coinbase a wells notice on March 22 outlining that SEC staff had recommended the agency take enforcement action over “possible violations of securities laws” concerning some of the firm’s asset listings, staking services and Coinbase Wallet.

In a March 23 blog post titled Europe is winning. Will the US catch up? Daniel Seifert, Coinbase’s Vice President and Regional Managing Director in Europe, stressed that the U.S.’s “regulatory approach to crypto has been marked by regulation by enforcement,” despite industry-wide calls for “comprehensive crypto regulation.”

“This approach has created an environment of uncertainty and instability in the crypto industry,” he wrote.

As such, Seifert argued that the U.S. is losing its status as the leading hub of the crypto sector, while France, the U.K. and the European Union, are now building “vibrant” ecosystems due to their friendlier approach to crypto regulation.

“The US has left a vacuum that other countries are eager to fill,” he wrote, adding: “we are proudly an American company. It’s hard to sit by and watch the US squander the opportunity it has been given.”

In particular, Seifert highlighted the significance of the Blockchain Week event being hosted at the Louvre in Paris this month. He also pointed to the U.K.’s recent push to become a crypto hub, and the European Union’s Markets in Crypto-Assets (MiCA) regulation that is slated to come into effect in 2024.

“This year it’s being held in a private space at the Louvre, arguably the greatest national treasure in France and one of the world’s most respected museums,” he said, adding:

“To me this is a clear signal: France is rapidly recognizing the opportunity that crypto presents and is offering it space to flourish. The broader EU, the UK, UAE, Hong Kong, Singapore, Australia, and Japan are all following suit.”

The MiCA legislation has been in development for two years, and aims to establish a “harmonized set of rules for crypto-assets and related activities and services.”

Related: Cathie Wood’s ARK loading up on Coinbase shares again, buying $18M

It is generally expected to be a positive move for the European cryptocurrency ecosystem, as it will offer clear rules and guidelines for the sector.

“Already we are seeing that Europe now matches the US in its share of crypto developers ( 29% apiece globally). The US used to lead the charge with 40%,” he said, adding that:

“This level of growth does not happen by chance. Concerted efforts have to be made, such as developing a regulatory framework that will provide clarity and stability for businesses operating in the space.”

In a lengthy March 23 Twitter thread, the Crypto Council for Innovation also highlighted similar points to Seifert, noting that “crypto is global, and nobody is waiting around for the US to land the plane.”

The thread explored positive developments across the globe, including examples such as the National Australia Bank’s work with non-USD pegged stablecoins, Hong Kong’s efforts to become a digital asset hub, and the Canadian Securities Administration recently imposing "enhanced investor protection commitments" on domestic crypto exchanges.

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EU MiCA crypto regulation is a ‘balancing act’: Paris Blockchain Week 2023

Industry experts and regulators weigh in on the European Union’s proposed MiCA rules at Paris Blockchain Week.

Regulators and industry players highlighted a number of implications and potential impacts of the European Union’s Markets in Crypto-Assets (MiCA) regulation at the Paris Blockchain Week 2023.

A panel titled ‘MiCA: How is the EU Regulating Crypto?’ delved into the proposed MiCA regulation which is expected to take effect in 2024. The 400-page regulatory guideline for cryptocurrencies and digital assets has been a major talking point across the continent.

Unpacking MiCA and its implications - a panel discussion featuring industry experts and regulators at Paris Blockchain Week 2023. 

Gundars Ostrovskis gave inside insights into the development of the MiCA documentation, given his involvement as a team leader in the Digital Finance Unit of the European Commission. Working alongside colleagues that drafted the MiCA regulations, Ostrovskis highlighted the belief that the legislation will be of benefit to companies and users in the cryptocurrency ecosystem:

“We clearly expect it to be helpful in terms of strengthening the industry by giving regulatory certainty, this is one of the things that is important for businesses strategic planning, and protecting customers of the industry while ensuring market integrity.”

MiCA has been in development for a couple of years and has involved conversations with various countries as well as industry players. Ostrovskis highlighted that the implementation of MiCA will require adjustments in states where regulatory frameworks for the cryptocurrency industry already exist.

Related: European Parliament Committee passes MiCA crypto framework in landslide vote

Janet Ho, head of EU policy at Chainalysis, believes that the success of MiCA will be dependent on a number of factors. Firstly, sufficient understanding of the requirements of the legislation will be required followed by robust feedback and reworking of certain parts of the documentation:

“Legislation is not a static process. There’s not always a perfect piece of regulation. We know there will be reviews and improvements.”

Ho suggested that the European Commission should review the implementation of obligations considering feedback from government supervisors and industry participants and the initial impact of MiCA.

Hubert de Vauplane, partner at law firm Kramer Levin Naftalis & Frankel LLP, also provided food for though as an advisor to European and French lawmakers on a variety of areas including FinTech, economic and digital payment.

De Vauplane was particularly concerned about the impact of MiCA on existing cryptocurrency and Web3 regulations in specific countries in the European Union:

“Some countries like France have local regulation. It is important to keep in mind that those regulations will disappear, potentially entirely.”

Hubert noted that newer industry phenomenon like nonfungible tokens (NFTs) and DeFi products and platforms that are not currently included in the MiCA documentation may well continue to fall under the purview of country-specific laws:

“That means that there is no space for local regulation which is covered by MiCA, specifically for the definition of digital assets.”

Nadia Filali, Caisse des Dépôts Group’s blockchain program’s director, stressed the importance of governments, regulators and industry participants working together, highlighting the development of regulation in France as an example:

“For me the regulation is something that could help innovation and could help the popularity of the technology.”

Ostrovskis remained convinced that the EU Commission has provided a good balance of regulatory parameters for certain aspects of the cryptocurrency ecosystem while leaving other areas more open to unencumbered development:

“That will provide a sound regulatory framework for many activities in the crypto asset ecosystem while we also have this centralized finance (CeFi) space, which will, to some extent, remain unregulated.”

Ostrovskis stressed that CeFi and DeFi is an area in which the European Commission wants to foster innovation, allowing for new ideas to be tested as the space develops:

“These activities are still of a limited scale, which also has some characteristics that allows us to, let's say, leave it on its own for the time being before it possibly endangers financial stability.”

A final vote on the European Union’s MiCA regulation is set for April 2023. The anticipated final decision on the legislation was deferred in Jan. 2023, due to technical issues relating to the translation of the document into the 24 official languages of the EU.

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Dutch Financial Regulator Vows Strict Treatment of Crypto Business Under MiCA

Dutch Financial Regulator Vows Strict Treatment of Crypto Business Under MiCAThe financial regulatory body of the Netherlands intends to maintain tough attitude towards the Dutch digital assets sector despite looser European rules. The head of the agency overseeing the industry doesn’t think crypto is good news and highlights its flaws in an article. Head of Dutch Financial Authority Says Cryptos Are Difficult to Fathom, Vulnerable […]

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War had no impact on Ukraine’s regulatory approach to crypto, Kyiv lawmaker says

The adoption of crypto law in Ukraine has been slowed down mainly due to the need to adapt it to tax and civil codes, an official told Cointelegraph in an exclusive interview.

A year after Russia’s invasion, Ukraine continues working on cryptocurrency legislation, but the war has not changed its regulatory stance, according to a Kyiv official.

Ukraine has continued to follow in the footsteps of the European Union in regard to adopting digital asset laws, Ukraine’s securities commissioner Yurii Boiko told Cointelegraph in an interview.

Boiko said that the Ukrainian lawmakers have been working to implement major European crypto regulations, known as the Markets in Crypto Assets regulation, or MiCA.

“The approach to the regulation of the virtual asset market has not changed during the war,” Boiko stated, adding:

“We clearly know where we should go, because our path is European integration and the introduction of better EU norms and rules to our markets. Therefore, we confidently go our own way and implement MiCA regulations into the legislative plan.”

Boiko noted that the adoption of crypto legislation in Ukraine has been slowed down mainly due to the need to develop necessary amendments to the country’s tax and civil codes. Another factor is Ukraine’s path to European integration, the official said, adding that Ukraine’s National Commission on Securities and Stock Market (NSSMC) has been actively cooperating with international colleagues to implement regulations like MiCA.

NSSMC commissioner Yurii Boiko

According to Oleksii Zhmerenetskyi, head of the parliamentary group Blockchain4Ukraine, the country's legislature originally started working on regulating the cryptocurrency market back in October 2017. 

“Unfortunately, at that time, the Verkhovna Rada of the eighth convocation was unable to adopt a crypto law, and only since the election of President Volodymyr Zelensky, Verkhovna Rada of the ninth convocation returned to consideration of it,” Zhmerenetskyi said. The lawmakers subsequently created the Blockchain4Ukraine group together with more than 50 deputies in September 2019, he noted.

Zhmerenetskyi added that a working group under the NSSMC is currently finalizing a package of amendments to the draft law “On Virtual Assets” in order to adapt it to MiCA, which will be voted on by the European Parliament in April. As soon as the package is adopted and signed by the president, the NSCSM and the National Bank of Ukraine (NBU) will prepare by-laws and then Ukraine will officially launch the virtual assets market, he said.

“We plan to do this by the end of this year,” Zhmerenetskyi stated.

Related: Ukraine netted $70M in crypto donations since start of Russia conflict

As previously reported, Ukraine’s central bank banned Bitcoin (BTC) purchases with the local currency, the Ukrainian hryvnia, in April 2022. The NBU only allowed Ukrainians to buy crypto with foreign currency and total monthly purchases not exceeding 100,000 hryvnia, or $3,300, at the time.

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Industrial Giant Siemens Issues €60 Million Digital Bond on Blockchain

Industrial Giant Siemens Issues €60 Million Digital Bond on BlockchainGerman conglomerate Siemens has for the first time issued a blockchain-based digital bond denominated in euros. In an announcement, the corporation highlighted the benefits of using blockchain, including the opportunity for direct sale to investors. Digital Bond Issued Under Germany’s Electronic Securities Act The largest industrial manufacturer in Europe, Siemens, announced it has become one […]

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Bank of Italy selectively encouraging DLT, preparing for MiCA, governor says

Italian central banker Ignazio Visco talked about fostering or discouraging crypto assets during a lengthy speech to the Italian financial markets association.

The Bank of Italy is looking for new ways to apply distributed ledger technology (DLT) and is preparing for the advent of Markets in Crypto-Assets (MiCA) regulation, bank governor Ignazio Visco told a congress of Assiom Forex, the Italian financial markets association, on Feb. 4. 

DLT may offer benefits such as cheaper cross-border transactions and increased financial system efficiency, Visco said. The Italian central bank “is focused on the need to identify areas” where DLT can contribute to financial stability and consumer protection.

Visco expressed the desire to see regulations that sorted out the crypto-asset market to separate “highly risky instruments and services that divert resources from productive activities and collective well-being” from those that bring tangible benefit to the economy:

“The spread of the latter can be fostered by developing rules and controls similar to those already enforced in the traditional financial system; the former, instead, must be strongly discouraged.”

Visco specifically mentioned “crypto-assets with no intrinsic value” among the former group.

The Bank of Italy is working at the European and global levels to develop the technology and a framework of standards, Visco said. It is also collaborating with Italian securities market regulator CONSOB and the Ministry of Economy and Finance to initiate the “authorization and supervision activities” of MiCA.

Related: EU postpones final vote on MiCA for the second time in two months

Italy recently imposed a 26% capital gains tax on crypto-asset trading over 2,000 euros in 2023. However, Italian taxpayers have the choice of paying a 14% tax on their crypto-asset holding as of Jan. 1. This alternative is intended to incentivize taxpayers to declare their digital holdings.

Visco estimated the number of Italian households that own crypto assets at 2% and said those holdings were “modest amounts on average.”

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EU postpones final vote on MiCA for the second time in two months

The final vote was delayed due to issues in the translation of the 400-page legal document.

The final vote on the European Union’s (EU) much-awaited set of crypto rules, known as the Markets in Crypto Assets regulation (MiCA), was deferred to April 2023. It marks the second delay in the final vote, which was previously postponed from November 2022 to February 2023.

The latest delay is due to a technical issue where the official 400-page document couldn’t be translated into the 24 official languages of the EU, according to The Block. Legal documents like the MiCA, which are drafted in English, must comply with EU regulations and be published in all 24 official languages of the union.

The first delay in November 2022 that deferred the final vote to February was also caused by translation issues. A delay in the final vote means European financial regulators must wait longer before drafting the implementation rules for the legislation. Once the MiCA has received official approval, the financial regulators have 12 to 18 months to create the technical standards.

The European parliamentary committee passed the MiCA legislation in October 2022, nearly two years after it was first introduced in September 2020. The second delay comes even when there has been a growing demand for approval of the legislation, especially in the wake of the crypto contagion caused by FTX.

Stefan Berger, a member of the European Parliament’s economics committee, has described the FTX collapse as one of the “Lehman Brothers moments” that “must be prevented,” when arguing for the necessity of regulations such as MiCA.

With MiCA, European policymakers aim to set a standard regulation to establish harmonized rules for crypto assets at the EU level, thereby providing legal certainty for crypto assets not covered by existing EU legislation.

Related: MiCA legislation good news for crypto players — Binance Europe VP

The crypto regulation will establish guidelines for the operation, structure and governance of issuers of digital asset tokens. The legislation will also offer rules on transparency and disclosure requirements for issuing and trading crypto assets.

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Belgian MP receives Bitcoin salary for a year: Here’s what he learned

Christophe De Beukelaer considers his experiment successful, as he raised awareness among the local lawmakers.

At the end of January 2022, member of the Belgian parliament Christophe De Beukelaer became the first European politician to convert his salary to Bitcoin (BTC). Celebrating the anniversary of this experiment, Cointelegraph reached out to a lawmaker to know more about his experience. 

Back in 2022, Beukelaer, who represents Humanist Democratic Centre (CDH) party, cited the example of New York City Mayor Eric Adams and how American politicians are working to make their native states or cities Bitcoin hubs to justify his decision. The Brussels MP’s monthly salary of EUR 5,500 ($6,140) was to be converted to Bitcoin using the Bit4You crypto trading platform.

Related: Belgium says BTC, ETH and other decentralized coins are not securities

“I did this political act of paying in Bitcoin to defend political ideas,” shares Beukelaer, citing four ones: defending financial freedom and economic opportunity and combating financial illiteracy and growth model. The last one is perhaps the most interesting, as the lawmaker, who’s calling himself a “pragmatic environmentalist,” sees a clear link between Bitcoin and the environmental clause:

“What does the central bank do when it prints money as it has done in recent years? It gives the illusion of infinite resources and thus encourages all economic actors to produce and consume more and more.”

Beukelaer considers his experiment successful in both putting Belgium on the global crypto map and encouraging local officials to educate themselves on digital assets:

 “A lot of politicians said to themselves: ‘De Beukelaer is not an anarchist. If he is interested in Bitcoin, there must be something interesting behind it.’”

Was it comfortable in practical terms? The positive answer is hardly imaginable, given the BTC’s decline from almost $38,000 in Jan.2022 to $17,246 by press time in Jan.2023, but the MP didn’t regard his experiment as an economic strategy from the very beginning:

“It was a political act and not a financial gesture. Like those who grow mustaches in November to fight prostate cancer. I put this salary in Bitcoin on a cold wallet every month and I haven't touched it. My goal was not to live in crypto.”

While the first major step to Pan-European regulation is undertaken, Beukelaer highlights the reservations of the Markets in Crypto-assets legislation (MiCA):  the excessive constraints imposed on the personal holding of crypto or the way stablecoins are considered.

Europe is heading towards hard times, a politician believes, citing the crises in energy supply and climate, and the rise of authoritarian leaders. It is in that regard how Western countries will gradually understand the usefulness of crypto.

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French central bank governor pushes for crypto licensing ahead of EU laws

The Bank of France’s head said turmoil in the crypto markets proves the need to move to a mandatory licensing scheme for crypto firms “as soon as possible.”

The Bank of France’s governor has called for more stringent licensing requirements for crypto companies in France, citing the current turmoil in the crypto markets.

During a speech in Paris on Jan. 5, Francois Villeroy de Galhau said France shouldn’t wait for upcoming EU crypto laws to enact obligatory licensing for local digital asset service providers (DASPs).

The European Parliament’s Markets in Crypto Assets bill (MiCA) that provides a crypto-licensing regime isn’t expected to come into force until potentially sometime in 2024.

According to a Jan. 5 Bloomberg report, Villeroy addressed the country’s financial industry in his speech, stating:

“All the disorder in 2022 feeds a simple belief: it is desirable for France to move to an obligatory licensing of DASP as soon as possible, rather than just registration.”

Currently, crypto businesses providing crypto trading and custody are required to be “registered” with the Financial Markets Authority (AMF), the country’s market regulator.

A DASP license is optional, with those licensed forced to comply with a slew of requirements related to business organization, conduct and financing.

However, out of the 60 AMF-registered crypto firms, none are currently licensed as a DASP.

Villeroy speaking in December 2017 at a panel in Paris. Source: The Jacques Delors Institute

The call from Villeroy comes after an amendment was proposed in December by Senate finance commission member Hervé Maurey to eliminate a clause allowing companies to operate without a license.

Current laws in France allow firms to operate unlicensed until 2026 even if, or when, MiCA passes into law and establishes a licensing regime.

Deliberations in Parliament regarding the amendment will begin in January.

Related: French regulator AMF blacklists only 2 crypto websites in the whole year

MiCA has been grinding its way through the EU Parliament since September 2020.

On Oct. 10, the crypto framework was passed by the European Parliament Committee on Economic and Monetary Affairs, the result of negotiations between the EU Council, the European Commission and the European Parliament.

The final plenary vote for MiCA was rescheduled from the end of 2022 to February. European Parliament member Stefan Berger explained to Cointelegraph in November the reason for the delay was “the enormous amount of work for the lawyer linguists, given the length of the legal text.”

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