Home
News
- 1 European Union’s Market in Crypto-Assets (MiCA) legislation is going through its finishing stages.
- 2 The draft has introduced a ceiling on the stablecoin and many including crypto lawyers are unhappy about it.
If anyone thought that the world will adopt crypto without any hiccups, they were wrong. That’s probably because the economy is used to working on centralized norms. Crypto, on the other hand, runs on a decentralized distributed ledger. So some disputes will definitely arise. But what truly matters is, how our global economy will find a solution to it.
MiCA & Stablecoin limits
Something similar is happening right now with European Union’s Market in Crypto-Assets (MiCA) legislation. On May 31, the EU took a landmark decision by signing MiCA into law. It became the world’s first regulatory rulebook on crypto assets.
The crypto industry welcomed the legislation with open arms. However, it seems that the body and crypto advocates will have to hash out a few things. According to the draft, the group wants to implement a daily cap on transactions. The bill sets the threshold of daily transactions on stablecoins such as Tether and Circle’s USD Coin.
It has decided the ceiling to be 200 million euro ($219 million). Crypto lawyers quickly reacted to this update. Rachel Cropper-Mawer and Chander Agnihotri gave a formal statement about it. They said that the daily limit could discourage users from using stablecoins.
The attorneys said that stablecoins aim to denote the price of fiat currencies. Also, the industry incumbents introduced it as a solution to address the price volatility issue. It brings stability to the prices of Bitcoin and Ethereum and is quite pivotal to the entire ecosystem. And therefore, regulators should scale up the limit or revoke it.
Acknowledging the concerns of regulators
At the same time, the advocates took cognizance of some incidents that might have led to these rulings. Notably, the collapse of Terra and the de-pegging of USDC raised some questions about the capacity of stablecoins. The attorneys acknowledged that the regulators have full authority to introduce a cap like this.
Cropper-Mawer said that a 200 million Europ cap is still doable. It would then force the users and firms to limit their activities based on stablecoin. Emphasizing the growing adaption of stablecoins, she said the offered limit will not be sufficient. The regulators will have to cede to the demand in the future, so it’s better that they revise it right now.
The attorney hinted at a possible attempt of promoting CBDC by limiting the usage of other alternatives. She pointed out that MiCA lawmakers will have to consider the increasing popularity of stablecoins. Both the advocates acknowledged that MiCA has done a great job of addressing most issues of crypto users.
Under this system, small businesses and startups will get to tap the power of crypto.
Tether’s views on MiCA
In the meantime, Tether’s chief technology officer Paolo Ardoino expressed his views on this development. Speaking to Cointelegraph, he said that the government and crypto entities will have to work together to hammer out the issues. He also praised MiCA for addressing the specific concerns of the industry.
He noted that the daily limit has ticked off many crypto users. But the government has its own reasons for such implementations. So it is a must for both parties to sit together and discuss the differences.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
