Six months after its first response to the European Commission’s crypto legislative proposal, the International Association for Trusted Blockchain Applications, or INATBA, has released a detailed report on key issues regarding the planned regulations.
According to the recently published document, INATBA argued that the commission’s Markets in Crypto Assets regulations do not favor emerging cryptocurrency and blockchain firms. Instead, the blockchain group backed by Ripple and ConsenSys argued that the EC’s legislative proposal offers a significant advantage to incumbents in the legacy financial ecosystem.
Indeed, this criticism is common among crypto and blockchain stakeholders in jurisdictions moving towards a more regularized digital asset regulatory infrastructure. This opposition often revolves around the cost of compliance associated with the extensive financial and customer disclosure regimes demanded by regulators.
As previously reported by Cointelegraph, MiCA is part of the European Commission’s digital finance overhaul. While still theoretical, MiCA may be applicable across the European Economic Area if it is approved, without the need for individual national ratification.
The INATBA document also highlighted some deficiencies in the proposed MiCA regulations regarding the decentralized finance arena. According to the report, the MiCA regulatory framework does not “sufficiently facilitate” crypto niche markets like DeFi.
INATBA’s conclusions were drawn from surveys and engagements with crypto industry participants. According to INATBA, the purpose of these surveys were to gauge the level of regulatory awareness among crypto and blockchain participants.
Results suggested that 90% of the respondents claime to be sufficiently knowledgeable about MiCA. However, other control questions in the poll indicated that these same participants had yet to consult with regulatory and policy experts on the matter. For INATBA, this disparity could indicate that industry stakeholders might be unaware of important aspects of the MiCA framework. They added:
“We can assume that some intricacies of MiCA may have remained hidden from the respondents that do not possess a regulatory background. This also became apparent during the stakeholder engagement sessions, where many participants asked questions and clarifications in relation to specific provisions of MiCA.”
However, the majority of the participants did agree with the notion that MiCA would bring legal certainty to the European digital asset space. Indeed, if approved, the regulatory framework could make it easier for crypto businesses to operate across the European Union, and would likely put an end to regulatory arbitrage across the EU.
As part of its conclusion, INATBA called for greater engagement between EU policymakers and digital asset stakeholders in developing MiCA.