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The CEO of Binance has stated that crypto regulation in the EU is great but must eliminate stablecoin restrictions.
Binance CEO Changpeng Zhao believes that the European Union’s (EU) regulation pattern regarding crypto will become a gold standard worldwide. Crediting the regulatory framework of the European Union’s Markets in Crypto Assets (MiCA) as one worthy of emulation, Zhao stated:
“The EU MiCA regulation will become a global regulatory standard copied around the world.”
Speaking at Binance Blockchain Week in Paris on Wednesday, the Binance chief executive touched on how the regulation benefits crypto players. According to him, “instead of applying for 27 licences, you just have to apply for one, you will be passportable.”
However, Zhao also expressed some concerns beyond his laudable comments regarding the EU’s approach to crypto regulatory oversight. Chief among these are the Union’s regulatory restrictions on stablecoins. The current MiCA report has limitations on the issuance of US dollar-pegged stablecoins and has appropriated guidelines regarding the matter. During his speech, Zhao suggested that suppressing stablecoins could create liquidity bottlenecks in the digital assets marketplace. Referring to the EU’s current regulation stance, the Binance CEO stated:
“The drafts are not adopting USD-based stablecoins, which have 75% of the liquidity in the market.”
Others Echo Opinion of Binance CEO on EU Regulation Regarding Stablecoins
Some others also believe that such restrictions on stablecoins could eventually result in digital assets being banned from the EU bloc. For instance, two lobby groups, Blockchain for Europe and the Digital Euro Association, also share Zhao’s sentiment regarding limitations imposed on stablecoins. Acting on their stance against these restrictions, the lobby groups addressed a letter to the EU council back in August in a bid to undo the restriction. The letter read in part that “the three largest stablecoins by trade volume are at risk of being banned in the EU from 2024, due to quantitative limits on issuance and use of [e-money tokens] denominated in foreign currency under MiCA.”
This letter comes amid the administering of concrete MiCA treatment within the bloc regarding European Institutions. Back in June, EU legislators agreed to the core political points of the bloc’s governing regulatory framework. This MiCA framework oversees digital currencies and service providers across the 27 member states of the supranational union.
Since its conceptualization, the MiCA has seen general acceptance as a way to shape the largely unregulated crypto space. Furthermore, many in the EU believe that MiCA will give Europe a solid launchpad in global crypto regulation. In an email correspondence back in March, lead negotiator on MiCA for the European Parliament, Stefan Berger, said that MiCA is the first of its kind. As a result, Berger also stated that this gives the regulatory framework the potential to serve as a global role model.
Dawn of Crypto Regulation Across the Globe?
Still in its formative phase, crypto regulation continues to take shape across various governments all over the globe. For instance, in the United States, Congress is still navigating the crypto regulatory clime with participation from relevant federal agencies.