Binance CEO Changpeng “CZ” Zhao stated that while demanding, Europe’s Market in Crypto Assets (MiCA) regulatory framework might become a global standard for.
CZ stated during a fireside chat on September 14 at the Binance Blockchain Week in Paris that the proposed regulatory principles in MiCA are “excellent” and might become a worldwide standard for other regulators to follow.
The proposed MiCA legislation requires crypto businesses to seek for only one license to operate across the European Union’s 27 blocs.
CZ, on the other hand, added that MiCA was a touch too stringent in limiting access to dollar-backed stablecoins.
“The drafts are not adopting USD-based stablecoins which have 75% of the liquidity in the market.
Given that dollar-backed stablecoins are the primary source of liquidity for the global crypto market, restricting their availability in the EU may prevent investors from accessing deep liquidity to execute their transactions.
CZ praised the French Ministry of Technology for its role in developing the MiCA rules and expressed optimism about the future of crypto in France.
Paris is “probably… the financial hub of crypto in Europe and a larger part of the world.”
Because of the country’s favorable employment and tax rules, the Binance CEO suggested increasing the Binance workforce in Paris by “hundreds more.”
MiCA legislation in Europe
On June 30, 2022, EU legislators agreed to implement the Market in Crypto-assets (MiCA) regulation as a framework for regulating stablecoins and crypto asset providers.
Stablecoins, according to the recommendations, must be backed 1:1 by reserves that are “completely protected in the event of insolvency.” As a result, algorithmic stablecoins such as UST are not permitted in the EU.
The plan also restricted stablecoin issuance and trade limits. The European Banking Authority will supervise stablecoins with more than 10 million users or 5 billion euros in circulating supply (EBA). MiCA also set a daily trading volume limit of 200 million euros for stablecoins.
As a result, dollar-backed stablecoins like Tether (USDT) and USD Coin (USDC), which have daily trading volumes of 48.13 billion euros and 5.4 billion euros, respectively, will be regulated by the EBA.
Crypto-asset service providers must register with the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA). The crypto exchanges will be able to operate across the European Union with a single license from the regulators.