EU and America FastTrack Crypto Regulation Due To Russia

fasttrack crypto regulation

Welcome back to the Tribe! In this post we discuss America and Europe’s decision to FastTrack crypto regulation.

Nothing should be considered investment or financial advice. Enjoy the ride!

FastTrack Crypto Regulation

This situation in Russia seems to have forced the hands of both the US and European authorities to hasten their proposed regulation of cryptocurrency. Now, we are expecting regulations from the US and Europe within this week and the next.

American Response

The Russia – Ukraine Situation Fastracks Crypto Regulation In Europe and the US.

Since the US and Europe rolled out Economic sanctions on Russia. There has been some apprehension with the authorities that crypto might be used as a vehicle to evade them.

According to Bloomberg, the US is concerned with the Russian people and organizations that could use cryptocurrency to evade international sanctions. This seems to have increased the urgency of the executive order that will regulate cryptocurrency. The executive order that President Biden is set to sign this week, will assign the U.S. federal agencies to examine the risks and opportunities that come with digital currencies.

“The long-awaited Biden executive order on cryptocurrencies — outlining the admin’s view of digital assets and directing a further study of economic, regulatory, and national security issues is finally expected to be signed by the president this week,” said Jennifer Epstein, the White House reporter at Bloomberg.

This timeline was also confirmed by Kayla Tausche who is the White House anchor at CNBC. she said “Biden administration will release its long-awaited crypto EO by mid-week, aiming to coordinate policy-making for digital assets among various agencies, expected to report back over the next 3-6 months, an admin official says,”

Furthermore, concerning the use of cryptocurrency to evade sanctions, Him Das, acting director of Treasury’s Financial Crimes Enforcement Network, said in a press release “Although we have not seen widespread evasion of our sanctions using methods such as cryptocurrency, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people,”

European Response

The European Union will vote on passing the Markets in Crypto Assets (MiCA) which is a key cryptocurrency law next week. On the other hand, the widely-criticized ban on proof-of-work tokens will no longer be considered.

Stefan Berger a European MP tweeted that the Economic and Monetary Affairs Committee (ECON) will vote on the bill on March 14.

Heute habe ich den finalen MiCA-Entwurf eingereicht. Der ECON-Ausschuss wird am 14. März 2022 hierüber abstimmen
➡️ Thread #MiCA

— Stefan Berger (@DrStefanBerger) March 7, 2022

He also suggested that crypto-assets should be recognized as an investment and regulated by the taxonomy system, like all other financial products in the EU. He also cleared the air on the ban on proof-of-work. Saying it is no longer planned in MiCA.

ECON was initially supposed to vote on the bill on February 28. But Berger postponed the vote. His reasons were concerns over a potential ban on proof-of-work tokens due to their high energy requirements. Crypto’s huge energy footprint has been a focal point in the EU with discussions involving MiCA.

MiCA is part of a broader digital finance reform in the EU. the piece of regulation was introduced in 2020 and adopted by the European Council in 2021. Even if it gains a majority vote by March 14 when the vote will be held, it will still need to be considered by the European Council. So, we still have a long way to the adoption of MiCA.

Crypto-Friendly Laws

A senior Democrat senator has called for American regulators to consider more crypto-friendly regulatory policies rather than champion rigid laws and intense crackdowns on the burgeoning industry of digital assets. The comments come months after SEC official Gary Gensler likened crypto to the wild west.