Bank Of France Governor Calls For MiCA 2 To Oversee Crypto Conglomerates

Governor Villeroy de Galhau, the esteemed leader of the Bank of France, highlights the critical importance of international cooperation, such as MiCA 2, in regulating crypto conglomerates. He emphasizes the need for collaborative efforts among nations to effectively address the challenges posed by these conglomerates. Villeroy suggests revisiting the recently adopted crypto legislation within the European Union and considering comprehensive measures to tackle this multifaceted issue.

Insufficient Regulation – Is MiCA 2 A Solution?

Villeroy points out the insufficiency of regulating individual entities within a single jurisdiction and draws attention to U.S. crypto companies that operate through multiple legal entities across different jurisdictions. This highlights the need for global collaboration in tackling this intricate challenge.

While acknowledging the commendable advancements in crypto regulation within the European Union, Villeroy suggests the potential necessity for a revised version of the Markets in Crypto Assets (MiCA 2) legislation. He refers to MiCA 2 as a revised legislation specifically addressing regulatory measures concerning crypto conglomerates. MiCA 2 was approved by the European Parliament in April and endorsed by the EU Council in May, making it the world’s pioneering comprehensive set of crypto regulations. This is seen as a substantial initiative to effectively regulate and supervise the crypto sector.

The introduction of MiCA 2 follows notable events like the collapse of major players such as a cryptocurrency exchange and subsequent regulatory crackdowns on industry leaders like Binance. These occurrences further highlight the pressing need for robust regulatory frameworks to ensure the stability and integrity of the crypto industry.

Advocacy For ‘MiCA 2’

The current framework of MiCA does not encompass specific digital asset-related activities, products, and services, such as crypto lending, decentralized finance (DeFi), and non-fungible tokens (NFTs). To address this, notable figures like Christine Lagarde, the president of the European Central Bank (ECB), advocate for the implementation of a secondary set of regulations referred to as “MiCA 2.”

During a tech forum in Paris, Villeroy emphasizes the nascent nature of decentralized finance as a technological innovation. He expresses the need to subject actors using this technology for financial services to regulation and highlights the importance of uniform rules to address risks associated with such activities.