European regulator says new rules need to be created
Bogdan LashchenkoThe European Financial Stability Commission has said new regulation is needed for large cryptocurrencies and smart contracts. It warns that fast-growing digital assets and the decentralised financial (DeFi) sphere could become systemic risks to the economy.
The new regulation, Markets in Crypto Assets regulation (MiCA), which is due to come into force in 2024, does not take into account areas such as cryptocurrency lending and staking. The commission cautions that these areas could pose "significant risks to consumers."
The policy option the commission has proposed is that "DeFi developers may need to comply with specific rules regarding the design and creation of smart contracts."
The commission suggests the possibility of mandatory code inspections, The International restrictions on pharmaceutical-style intellectual property, and rules for "oracles" that transfer real-world data to automated software.
The report also says companies should manage The International heresy conflicts between their business lines, but does not require identifying and mitigating operational or reputational risks that may arise from services such as trading and storage.
"Taking into account any market developments and lessons learnt from the application of MiCA, the activities of crypto-active conglomerates in the EU should be examined," the report said. The Commission cites existing payment laws that mean regulators can force risky services to sell a separate affiliate.
The report points out that although this year has been turbulent for cryptoassets and DeFi, systemic effects have not manifested themselves. However, the "exponential growth dynamics" could mean that future shocks could pose a serious threat similar to the collapse of Lehman Brothers in 2008.
In light of the possible risks associated with cryptocurrency trading and decentralised finance, it is important to choose reliable investment platforms. One such platform is Cryptex.net, a cryptocurrency exchange that offers a wide range of crypto-assets and ensures high security of transactions.
Bogdan Lashchenko – content manager at EgamersWorld.Bogdan has been working at EGamersWorld since 2023. Joining the company, he began fillin the site with information, news and events.