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ECB’s Elizabeth McCaul Not Satisfied with the Current MiCA Iteration – Excerpts

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Elizabeth McCaul.
Elizabeth McCaul.

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Cryptocurrencies have grown to become one of the most talked about industries at the moment, thanks to the growing userbase and innovative solutions it brings to the table. Since 2019, the number of crypto investors and people participating in the blockchain sector has shot up considerably, which has made it vital for a regulatory framework to be put in place. But the initiation of this in Europe has started to attract some concerns, with the most recent warning coming from a European Central Bank official.

After the market crash, the frontrunner crypto Bitcoin had managed to stay at the same price level for a long time, giving policymakers time to come up with rules and regulations for their respective countries. While a global framework may be a distant possibility at the moment, the need to build legal barriers to safeguard investors within each country was evident.

About the ECB’s Markets-in-Crypto Assets Bill

The Markets in Crypto-Assets Regulation (MiCA) is an upcoming European Union (EU) regulation that is set to regulate the various activities that take place in the crypto-assets market. This regulation has been in the works for more than two years, and after significant deliberation, the European Council finally approved its text in October 2022. MiCA aims to set up a comprehensive regulatory framework that will govern the activities of crypto-asset issuers and service providers while at the same time promoting innovation within the crypto and Web3 space.

One of the primary objectives of MiCA is to protect consumers and investors by ensuring that all crypto-related activities comply with a set of minimum standards that are designed to minimize risk and maximize transparency. This regulation will introduce several key provisions, including requirements for disclosure, authorization, and supervision of crypto-service providers and issuers.


Under the MiCA framework, all crypto-service providers will be required to have a registered office in one of the EU member states and obtain authorization from the relevant national competent authorities before they can offer any crypto-related services. This is designed to provide a level of security for consumers and investors, ensuring that only reputable and trustworthy companies are allowed to operate in the market.

Another crucial aspect of the MiCA regulation is its focus on promoting financial stability within the crypto-assets market. The regulation is designed to prevent fraudulent activities, including money laundering and terrorist financing, by ensuring that all crypto-service providers and issuers comply with strict anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

MiCA, despite being slated to come into force in early 2024, has the principal aim of protecting consumers and investors, as well as bolstering financial stability in the market, all while avoiding any potential dampening effect on innovation in the crypto and Web3 space.

“We need Better Oversight of Crypto Activities”- Elizabeth McCaul

Elizabeth McCaul is a Member of the Supervisory Board of the ECB, which oversees the passing of multiple rules and regulations and complex regulatory frameworks in the finance sector. On 5th April, McCaul published a blog on the media section of the ECB’s official website, stating that there may be several gaps that must be addressed in the existing framework.

MiCA report

The member contends that while the new bill is a positive development in the regulation of the crypto market, it lacks the necessary measures to supervise exchanges using quantitative metrics, thereby limiting its effectiveness in promoting transparency and accountability in the sector. She raised awareness about the problems that could ensue in the future if companies were given the kind of freedom they have access to at the moment without stricter compliance policies.

The top two examples McCaul used included Binance and FTX- the now-defunct exchange. Talking about Binance she said that while Binance didn’t have an exact physical office or headquarters, there should be no leniency in the policies it must adhere to as a global company. She also added that as per the current MiCA policy, the number one exchange may not even be able to make the cut since the paper didn’t take into consideration other important metrics as its criteria.

Binance hit back to these statements by saying that ​​it has always been vocal about bringing regulatory policies to the blockchain segment and was happy to comply with the MiCA framework or any such regulation the policymakers would come up with to ensure the safety and security of investors.


As a member of the Supervisory Board of the European Central Bank, McCaul has extensive experience in overseeing the prudential supervision of banks and financial institutions, and her concerns reflect the need for a robust regulatory framework that can effectively manage the risks associated with the crypto-assets market.

While the creation of a regulatory framework may be complex and time-consuming, there is no doubt that it will act as a fence to prevent illicit activities using the technology and promote innovative and useful technologies and projects that could provide major value to the world in the upcoming years.

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