The European Central Bank (#ECB) recently issued 3 reports in order to pass the biggest Crypto Law:
Markets in Crypto-Assets (#MiCA)
Will the crypto ecosystem suffer from these laws?
Will the ECB gain full control of the cryptocurrency market?
We deconstruct it for you: 👇🧵
Markets in Crypto-Assets (#MiCA)
Will the crypto ecosystem suffer from these laws?
Will the ECB gain full control of the cryptocurrency market?
We deconstruct it for you: 👇🧵
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2/9
The ECB warned policymakers that crypto might be threatening the financial stability of the economy
The ECB also urged policymakers to pass the Markets in Crypto-Assets (MiCA) law
The ECB is concerned about the contagion risks that the #crypto markets possess
The ECB warned policymakers that crypto might be threatening the financial stability of the economy
The ECB also urged policymakers to pass the Markets in Crypto-Assets (MiCA) law
The ECB is concerned about the contagion risks that the #crypto markets possess
3/9
The purpose of MiCA is to protect users against fraud and shady actors who will be held accountable if they fail to repay user funds
Prior to the interlinkage of #TradFi & #DeFi, they intended to reduce the risks of DeFi to avoid "spillover effects" on conventional markets
The purpose of MiCA is to protect users against fraud and shady actors who will be held accountable if they fail to repay user funds
Prior to the interlinkage of #TradFi & #DeFi, they intended to reduce the risks of DeFi to avoid "spillover effects" on conventional markets
4/9
Here's a breakdown of the important changes to be made:
• The ECB is concerned about the stability & peg-mechanism of #stablecoins
Stablecoins specifically threaten financial stability because of their contagion risks, the ECB said
Here's a breakdown of the important changes to be made:
• The ECB is concerned about the stability & peg-mechanism of #stablecoins
Stablecoins specifically threaten financial stability because of their contagion risks, the ECB said
5/9
Stablecoin issuers will have to keep significant reserves on hand and be fully transparent about their assets and liabilities with the ECB
• The ECB is also concerned about the carbon emissions from protocols that adopt token mining mechanisms (#PoW)
Stablecoin issuers will have to keep significant reserves on hand and be fully transparent about their assets and liabilities with the ECB
• The ECB is also concerned about the carbon emissions from protocols that adopt token mining mechanisms (#PoW)
6/9
MiCA mandates crypto firms to report their energy usage and emissions since there are currently no "#decentralized" solutions to solve the environmental impact of PoW mechanisms
• The ECB criticized DeFi for its lack of use cases and for mimicking TradFi practices
MiCA mandates crypto firms to report their energy usage and emissions since there are currently no "#decentralized" solutions to solve the environmental impact of PoW mechanisms
• The ECB criticized DeFi for its lack of use cases and for mimicking TradFi practices
7/9
They want DeFi to be supervised and regulated in the same way as TradFi, since DeFi is subject to the same vulnerabilities as TradFi
The law will ultimately help protect consumers from unethical practices, but the issue of decentralization is still up for debate!
They want DeFi to be supervised and regulated in the same way as TradFi, since DeFi is subject to the same vulnerabilities as TradFi
The law will ultimately help protect consumers from unethical practices, but the issue of decentralization is still up for debate!
9/9
We hope you've found this thread on MiCA helpful.
Follow @Momentum_6 to stay updated about the upcoming MiCA law.
Part 2 of this thread will be coming out very soon!
Please help share this thread by giving us a Like/Retweet
We hope you've found this thread on MiCA helpful.
Follow @Momentum_6 to stay updated about the upcoming MiCA law.
Part 2 of this thread will be coming out very soon!
Please help share this thread by giving us a Like/Retweet
https://twitter.com/Momentum_6/status/1555207006310453250
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