1. BITBILIHome
  2. Article

European trade body calls for DeFi inclusion in Europe’s MiCA regulatory framework

• 42 views

TL;DR Breakdown

  • The AFME urges the inclusion of DeFi in MiCA regulations to prevent regulatory arbitrage.
  • It proposes an EU taxonomy for DeFi activities for better regulation.
  • AFME’s recommendations aim to stimulate industry discussion on DeFi regulation while MiCA is in the consultation phase.

Description

The Association for Financial Markets in Europe (AFME) is urging European regulators to include decentralized finance (DeFi) in the Markets in Crypto Assets (MiCA) regulations, cautioning against potential risks that could undermine the effectiveness of the regulatory frameworks if DeFi is excluded. The MiCA regulations, poised as the first comprehensive crypto legislation, are due to … Read more

The Association for Financial Markets in Europe (AFME) is urging European regulators to include decentralized finance (DeFi) in the Markets in Crypto Assets (MiCA) regulations, cautioning against potential risks that could undermine the effectiveness of the regulatory frameworks if DeFi is excluded.

The MiCA regulations, poised as the first comprehensive crypto legislation, are due to come into effect in December 2024. However, the legislative framework currently bypasses emerging financial sectors like DeFi and nonfungible tokens (NFTs).

In a whitepaper titled “Decentralised Finance – Principles for building a robust digital economy,” AFME warns that this exclusion could inadvertently engender risks to financial stability and cause unforeseen consequences. Despite the current inconsequential overlap between traditional finance (TradFi) and DeFi, AFME urges that this interaction should be actively monitored and managed.

According to the AFME, DeFi represents significant innovation within the financial ecosystem. The body views the burgeoning DeFi efforts as “outsourced innovation and research and development labs for the formal financial system.”

Building a consistent and comprehensive regulatory approach

AFME, an industry advocacy group championing wholesale market participants in Europe, proposes that the European Union develop a clear classification system, or taxonomy, for DeFi activities and digital assets. Such a taxonomy would facilitate the formulation of a comprehensive regulatory solution to tackle the unique challenges presented by DeFi.

In terms of governance within the decentralized ecosystem of DeFi, the trade body advocates for a consistent regulatory framework incorporating different levels of centralization. It further encourages a risk-based approach, underscoring the need for regulation to reflect the varying risk levels inherent in different DeFi activities.

The paper serves as an initial exploration of technical issues associated with this new realm of digital finance, along with preliminary proposals on how to address DeFi from a regulatory standpoint. AFME emphasizes that its request isn’t intended as a conclusive solution. Instead, it aims to foster dialogue across the industry to formulate innovative policy solutions for DeFi, involving both the public and private sectors.

With MiCA currently in the consultation stage, the European Union is set to launch a three-part consultation process starting in July. Also, the insights and suggestions garnered will be subject to approval by the European Commission, European Parliament, and European Council, thus setting the stage for potential legislative evolution that will shape the future of the DeFi landscape in Europe.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:European trade body calls for DeFi inclusion in Europe’s MiCA regulatory framework

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年7月9日 01:30
Next 2023年7月9日 03:00

Related articles

  • Ethiopia makes bold bid to join BRICS alliance

    TL;DR Breakdown Ethiopia, one of Africa’s fastest-growing economies, has requested to join the BRICS alliance of emerging markets. The BRICS, an economic bloc consisting of Brazil, Russia, India, China, and South Africa, accounts for over 40% of the global population and about 26% of the world’s economy. Ethiopia’s bid to join the BRICS is part of the nation’s strategic move to associate with international institutions that can protect its interests. Description Ethiopia, celebrated as one of Africa’s rapidly advancing economies, has cast its ambitions toward the BRICS alliance of emerging markets. In a bold strategic move, the African nation has officially requested to become part of this potent bloc that is making its mark on the global economic stage. Ethiopia’s appeal to BRICS: A strategic move … Read more Ethiopia, celebrated as one of Africa’s rapidly advancing economies, has cast its ambitions toward the BRICS alliance of emerging markets. In a bold strategic move, the African nation has officially requested to become part of this potent bloc that is making its mark on the global economic stage. Ethiopia’s appeal to…

    Article 2023年7月3日

  • Cricket Legend AB de Villiers Shares Insights on NFT Hack

    TL;DR Breakdown AB de Villiers, the renowned cricket legend, reveals how he was tricked by a malicious NFT contract and lost a significant part of his collection. De Villiers shares his early investments in cryptocurrencies, including XRP, and expresses his interest in exploring various aspects of the Web3 industry. AB de Villiers, the renowned South African cricket legend, recently opened up about his personal experience with a devastating NFT hack. In an interview with Cointelegraph, de Villiers revealed how he inadvertently fell victim to a malicious NFT contract, resulting in the loss of a significant portion of his NFT collection. Additionally, he shared his early investments in cryptocurrencies, including XRP, and expressed his interest in exploring the Web3 industry. This article delves into de Villiers’ revelations, highlighting the hacking incident and his journey into the world of cryptocurrencies. Contents hide 1 AB de Villiers’ NFT Hack: Lessons Learned in Navigating Web3 2 AB de Villiers’ Affinity for XRP and Web3 Exploration 3 AB de Villiers’ Future Endeavors in the Web3 Industry 4 Conclusion AB de Villiers’ NFT Hack: Lessons Learned…

    Article 2023年6月6日

  • There goes China’s the hope for economic growth

    Description China’s future economic growth has taken a questionable turn. Contrary to market expectations, the nation has only partially trimmed its benchmark lending rate. As the world observes, it becomes apparent that the Asian powerhouse is battling an array of challenges, from a languishing property sector to a slackening currency. Unfulfilled Predictions and Economic Riddles When … Read more China’s future economic growth has taken a questionable turn. Contrary to market expectations, the nation has only partially trimmed its benchmark lending rate. As the world observes, it becomes apparent that the Asian powerhouse is battling an array of challenges, from a languishing property sector to a slackening currency. Unfulfilled Predictions and Economic Riddles When China made a mere 10 basis point cut to its one-year loan prime rate (LPR), bringing it to 3.45%, eyebrows were raised. The twist in the story? The five-year rate, with significant ties to mortgage lending, remains untouched at 4.2%. Forecasts had painted a different picture. Economists, in a seemingly unanimous voice, had projected substantial cuts to both rates. Goldman Sachs’ chief China economist, Hui Shan,…

    Article 2023年8月22日

  • Moody’s downgrades spark plunge in US midsize bank stocks

    TL;DR Breakdown Moody’s downgraded several midsize US bank stocks, causing a market decline. Reasons include a slowdown in deposits, increased funding costs, and commercial real estate risks. Europe felt the aftermath, especially with Italy’s 40% bank windfall tax announcement. Description After a domino effect initiated by Moody’s latest decisions, US equities tumbled, primarily driven down by midsize bank stocks. Here’s the lowdown on what’s been shaking Wall Street and how it might just be an omen of things to come. Moody’s Chilling Wind Over Wall Street You’d think by now Wall Street would be used … Read more After a domino effect initiated by Moody’s latest decisions, US equities tumbled, primarily driven down by midsize bank stocks. Here’s the lowdown on what’s been shaking Wall Street and how it might just be an omen of things to come. Moody’s Chilling Wind Over Wall Street You’d think by now Wall Street would be used to the ups and downs, but the recent dip in the S&P 500 and the Nasdaq Composite suggest otherwise. However, the real victims were the midsized US…

    Article 2023年8月10日

  • Fidelity missed a chance to compete with Coinbase, claims Jurica Bulovic

    TL;DR Breakdown Jurica Bulovic, ex-Fidelity executive, claims Fidelity could have been a strong competitor to Coinbase in the crypto sector. Bulovic argues that Fidelity should have taken advantage of an opportunity by being moderate in its early involvement with digital assets. Alex Thorn from Galaxy Digital agrees, stating that Fidelity was ahead of most traditional financial institutions entering the crypto space. Description Jurica Bulovic, a former Fidelity executive and current head of mining at Foundry, stated that Fidelity could have been a formidable competitor to Coinbase in the cryptocurrency exchange sector. The comments were made in a Wall Street Journal article, sparking discussions about what could have been a different landscape in the crypto industry. According to … Read more Jurica Bulovic, a former Fidelity executive and current head of mining at Foundry, stated that Fidelity could have been a formidable competitor to Coinbase in the cryptocurrency exchange sector. The comments were made in a Wall Street Journal article, sparking discussions about what could have been a different landscape in the crypto industry. According to Bulovic, Fidelity could be as…

    Article 2023年8月29日
TOP