Since Bank of England’s Jon Cunliffe’s warning in November of the impending risk to financial stability from the developing market, global regulators have been working individually to figure out comprehensive regulations for the nascent market. However, Mairead McGuinness, the European Financial Services Commissioner, has called for a global approach to regulations.
No Product Should Go Unregulated
In an opinion article on THE HILL on Sunday, Mairead McGuinness, the EU Financial Services commissioner, called for a global consensus on crypto regulations. McGuinness expressed conviction that the international community needed to work together for regulations to be effective.
The official identified what such a global regulatory effort would entail in the article. McGuinness wrote, “A global agreement on crypto should first enshrine that no product remains unregulated. Second, supervisors should collect and exchange information globally. Third, any agreement must protect retail investors. Fourth, the crypto ecosystem should fully integrate environmental considerations.” According to McGuinness, the US and the EU are best positioned to lead this development.
McGuinness firmly believes that global regulations could foster innovation with the right approach while protecting customers and maintaining financial stability. The top EU official conceded that blockchain technology could potentially benefit the world in several ways.
However, she noted that regulators could not ignore economic and environmental risks. McGuinness highlights the risks of sanction evasion, terrorism funding, and Bitcoin mining environmental concerns.
The EU is closing in on approving its comprehensive crypto regulatory framework, the Markets in Crypto Assets (MiCA), and other rules surrounding the nascent market. At the same time, various lawmakers are drafting bills to kick off the regulation of the nascent market in the US following Biden’s executive order.
The State Of EU Regulations And Panetta’s Speech
Notably, the official’s recommendation comes while the EU is currently in the middle of Trilogue talks on the TFR. The new AML regulation has been dubbed an effective ban on unhosted wallets in the region.
It is the second crypto rule that the crypto industry has had to push against in recent months. In March, the bloc came close to banning Bitcoin but was fiercely resisted by the crypto industry, and the EU ended up voting against it.
While crypto lovers hope the government can strike a balance between innovation and customer protection in regulations, statements from ECB executive member Fabio Panetta have not been encouraging. Panetta went as far as calling for more taxes on the market due to its environmental impacts.