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Recent developments in crypto, including the Terra and FTX collapse, have spurred regulators and government authorities to accelerate their efforts to oversee the industry.
Several countries have realized the need for a comprehensive regulatory framework for the asset class, such as Norway, whose Central Bank has called for a nationally tailored crypto assets regulatory strategy.
In its annual report, the Norges Bank suggested that the international regulation may be too slow and represent interests that don’t align with Norway’s.
Norway Needs Specific Crypto Regulations To Support National Interests, Says Norges Bank
The central bank of Norway released its Financial Infrastructural Report on May 25, 2023, asking relevant authorities to consider deploying a national strategy for the digital asset market.
This suggestion follows the recently approved Markets in Crypto Assets (MiCA) for the European Union crypto market. The MiCA applies to all countries within the European Economic Area.
However, Norges Bank thinks these rules would not be enough for Norway’s crypto assets market. The central bank believes Norway needs to develop crypto regulations specific to the country.
The Norges Bank Deputy Governor, Pal Lonva, said in a public statement: “The Norwegian authorities should assess whether to process more quickly rather than wait for “international regulatory solutions.” Norges Bank can contribute to such assessments and to regulation that promotes responsible innovation,” he added.
This statement implies that Norges Bank is ready to make inputs to regulate crypto and foster innovation. The central bank thinks the international regulations are slow and may focus on areas that don’t align with national interests.
MiCA covers a range of digital asset service providers. It includes market abuse, consumer protection, market integrity, and financial stability but not DeFi.
As the central bank said, MiCA does not cover:
“Developments in decentralized finance as the regulation’s primary focus is on centralized market participants.”
More Experience And Knowledge About Digital Assets Would Facilitate Effective Regulation
The report emphasized the need for crypto-specific laws noting the need for more knowledge on the attitudes, exposure, and application of crypto in the country.
Due to its novelty, the lack of knowledge and experience in digital assets could mitigate effective regulation. Norges Bank wants to fill that void and help increase people’s understanding.
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