Several experts met on Wednesday 25 November at an online conference organised by Finance Watch to discuss the proposal for a regulation on cryptoasset markets (MICa), presented by the Commission in September (EUROPE B12567A2). While they generally welcomed the Commission's ambition to act to put an end to the “Wild West” of cryptoassets, they also considered that several improvements were needed.

Author of an own-initiative report for the European Parliament (EUROPE B12577A10), MEP Ondřej Kovařík (Renew Europe, Czech Republic) stressed the need to categorize cryptoassets. The resolution adopted by the EP also highlights the importance of having a taxonomy that is open and sufficiently detailed, he reiterated. And, according to the MEP, the Commission's proposal seems to lack a bit of granularity in this respect.

Elie Beyrouthy, president of the European Federation of Payment Institutions (EPIF) and Vice President for Governmental Affairs of American Express, also recognized the importance of this initiative, but believed that other European legislation should & should also be revised, in particular the 'MiFID II' directive, in order to create an appropriate framework.

“Consumers want to have confidence in the system,” he insisted, using the example of the Western Union international payment solution, which is known to be more expensive than others, but which continues to be widely used due to its reliability. Mr Beyrouthy hoped that the 'MICa' proposal would indeed increase consumer confidence.

For his part, Wolf-Georg Ringe, professor of Law and Finance at the University of Hamburg, would have preferred a regulatory approach that was slightly less prescriptive and more open to experimentation.

Libra, the big turning point

Everyone agrees that Facebook's Libra cryptocurrency project has prompted member states and the EU to urgently update their legal framework to take into account 'stablecoins' and other categories of cryptoassets.

“The draft 'MiCA' regulation bears the mark of 'Libra' everywhere on it,” said Wolf-Georg Ringe, recalling that the Facebook initiative had been seen as a threat to European sovereignty (see EUROPE B12558A2) and that the subject of 'stablecoins' 'had become eminently political.

According to Virgile Perret of the Observatoire de la Finance in Geneva, if it were to see the light of day, Libra could well be a “turning point” in the history of money. Despite all the promises of financial inclusion, it should not be forgotten that his primary motivation is to compete with banks and to strengthen Facebook's business model, he nevertheless reiterated.

Participants also recognized that central bank digital currencies could be interesting alternatives.

Jürgen Schaaf, economist and adviser at the European Central Bank (ECB), shared the monetary institute's thoughts on the possible launch of a digital euro. The ECB is in a “pre-investigation” phase, he explained, and has not yet taken a decision.

For now, two options seem possible: a digital euro that would function like a token or that would be based on an account, Mr. Schaaf said. The ECB is also considering how to mitigate risks, for example by setting a threshold for the amount of digital currency that individuals could hold. (Marion Fontana)