Today we are resuming after some time our observations on the fate of crypto in international legislation and geopolitical balances, because we have to point out some very important recent events:
- The European Parliament's approval of the Crypto Asset Regulation.
- The humiliating hearing of the head of the SEC in the US Congress.
- The sudden passing of a pro-crypto law in Ukraine
Let's look at the three items on the list one by one....
## 1. The Crypto Assets Regulation (MiCA) was passed with 32 votes in favour, 4 against and 23 abstentions.
Here is a quick outline of its contents:
- **Stablecoins**, the difference between:
- asset-referenced tokens (tokens pegged to more than one currency or asset. Such as Libra);
- e-token (token pegged to a single currency or asset, such as USDT);
- algorithmic stablecoins (token that maintains its stability through a protocol. DAI type).
Only the first two types are subject to this regulation.
- Stablecoins (asset-reference and e-token) and their providers that have a significant level of users or capitalisation (this level is to be established by the EBA, i.e. the European Banking Authority) must follow certain rules linked mainly to:
- reserves (they must have a certain amount of currency reserves to cover the value of the token).
- governance (the organisational structure and lines of responsibility, monitoring, etc. must be certified).
- white paper (the document must follow the common European criteria established for this type of documentation).
- Service providers (trading, custody and payment providers, e.g. crypto-related payment card providers):
In order to operate with European users, they must apply for authorisation under the 2015 European Payment Services Regulation PSD2.
In practice, this rule only confirms what all services that currently operate with European users already do: Binance, Crypto.com and co. already have this type of authorisation, which in essence obliges them to meet the requirements of the so-called "mini-MIFid" valid also for traditional financial services.
A single licence acquired in a single EU country can be used to operate in all other EU countries.
This rule certainly benefits the traditional pro-crypto countries, such as Malta and some Balkan nations. It will be enough to obtain a licence in the facilitated bureaucracy of one of these countries to operate throughout Europe.
Attempts to establish crypto-valleys in Switzerland will also be scaled down. Why have a Swiss licence, which is unusable in the rest of Europe, when you can go to Malta and have with the same bureaucratic ease a licence valid for the whole continent?
### To summarise:
Once the famous rule that would have been punitive for miners has been deleted, the rest of the newly approved European regulation sets very reasonable rules, especially for stablecoins, and often only confirms what the most important crypto services companies operating in Europe have already done.
Any compliance that has not yet been fulfilled, such as the requirement for providers of new tokens to issue a withe paper that complies with European regulations, is easily achievable with the help of any experienced consultant or accountant.
## 2. The SEC Congressional Hearing.
The importance of this hearing lies in the fact that it sets a series of stakes in the SEC's ability to initiate litigation against blockchain and cryptocurrency services.
In particular, Congress made it clear to Gensler (head of the SEC) that during investigations against a particular company or firm, the authority must remain within the limits of the Paperwork Reduction Act, a regulation that in America protects investigators from possible multiple and repetitive requests for documentation that are intended to "sap the resistance" of the defendant and terrorize other companies and entities more or less related to them.
The Congressional hearing is a clear complement to the SEC's long-running litigation against Ripple, which ended in the latter's favour earlier that week.
But it is also a first step taken by Congress in compliance with and in support of Biden's very recent executive order in which the White House asks all regulators to act in the crypto and blockchain field so as not to hinder American innovation in this field.
This executive order in turn is important, because it makes clear what we have been speculating for the last two years, namely that the United States is getting closer to using bitcoin and crypto in general as a financial weapon to support the dollar and the economic system linked to it.
## 3. The law just passed by Zelensky granting crypto the status of a legal currency and asset.
The importance of this law lies in the fact that it indirectly shows how bitcoin and other cryptos are increasingly recognized geopolitically as an international proxy for the American financial system.
It is more and more evident that American allies are almost always favourable to crypto, while non-favourable countries almost always, and not surprisingly, belong to the other side of the new 'iron curtain'.
Thanks for reading.
Photo credits: Rafael Rex Felisilda | [@rafaelrex](https://unsplash.com/@rafaelrex) - released free to use.
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