of lawmaker tries to take into account changing rapidly of digital assets. In this way, Mika must allow the regulators to frameissuance of algorithmic stable coins and some NFT.
In early September, the rapporteur for the European draft law on the regulation of digital assets announced this Mika it would be ready for October. The schedule described by Stefan Berger must be respected.
CoinDesk was able to enter one the draft of the text of the future regulation date September 20. And if the document remains open for comments, it would be actually finalized. L’Europe therefore it is in the process of taking a new step in the management of crypto.
More flexible legislation to prevent its obsolescence
lawmaker it looks different would have wanted to take into account in the law of rapid innovation in this market. When the work of MiCA began, NFT AND algorithmic stablecoins were, for example, new topics.
Since then, their importance has grown. Therefore, the risk for the European authorities is to apply a regulations it is likely to get old very quickly. Therefore the challenge consists in relying on a text that offers a enough room for interpretation.
This approach to the law “favors substance over form”, which will allow it to apply to new assets, some of which are considered NFTs. Initially, non-fungible tokens should not be included in the scope of MCA.
However, our American colleagues report, the increase of asset allocation rearrange the cards. These consist of a set of interchangeable arguments representing a NFT. And if they are of interest to regulators, it is because these signs can be similar to financial securities.
NFTs are reclassified as fungible and therefore regulated tokens
Therefore, they would be regulated through the provisions set out in the MCA. As a result, “issuing crypto-assets in the form of non-exchangeable tokens in a large series or collection should be considered as an indication of their interchangeability,” the draft now specifies.
Sharing one unique token identifier not enough to exempt it from the regulations being developed. So how can we distinguish between NFTs subject to and those not subject to MiCA? It will be up to the regulators, national or European, to determine this.
It is up to these authorities, through an analysis of the asset’s characteristics, to determine its real qualification. It is this analysis that will be imposed on its “user assignment”. The issuer of these tokens cannot hope to escape MiCA simply by defining it as an NFT and assigning it some of its features.
Dollars, euros or algorithmic stablecoins: same rules
In addition to non-exchangeable tokens and their variants, Europe is interested stable currencyKind of algorithmic. The latter had an eventful year 2022. Even their operation has been criticized. Far from ensuring stability of value, these arguments can be subject to high volatility.
The legislature is also keen to learn the lessons of the past by taking into account a scenario à la TerraUSD. of algorithmic stablecoins hence they find their place in the MCA regulations.
[Les stablecoins sont régulés] regardless of how the issuer intends to design the crypto-asset, including the mechanism for storing stable value,” the text reads.
On the other hand, the legislator seems to remove the concerns that weigh on him stable currencies denominated in a currency other than the Euro. The original plan was to limit the issuance of these tokens, which would have excluded standard stablecoins such asUSDC. Now, the text clarifies that MiCA applies to stablecoins, regardless of the pegged currency.