Belgium’s digital minister says the EU will bring order to crypto

See: Belgium’s digital minister: EU plans to ‘bring order to crypto’ and create its own blockchain | Crypto Mile

The EU will “bring order to crypto” and create its own official blockchain for Europe, Belgium’s digital minister has said.

In this week’s episode of Yahoo Finance UK’s The Crypto Mile, Belgian Secretary of State for Digitization Mathieu Michel emphasized the need for trust and regulation in the rapidly evolving crypto ecosystem and said the EU’s new Markets in Crypto Assets (MiCA) bill addresses this.

The MiCA legislation is the world’s first regulatory framework for cryptoassets and is due to come into force between 2024 and 2025.

“The new MiCA bill will boost the crypto industry in Europe because Europeans are very strong on building regulation and the purpose of this regulation is always to build trust,” Michel told The Crypto Mile.

“There is a lot of opportunity for blockchain, in the way value is exchanged, but it needs to be done in a trusted ecosystem, which is why MiCA has the power to unlock the potential of this industry.

Read more: Europeum: A blockchain network for the EU

“If you think crypto is just a currency, this is a bad way to identify cryptoassets. A lot of people see cryptoassets as just a financial tool. I see them as a way we can exchange value, and a way we can protect privacy on. . The EU will use MiCA to bring order to crypto, through regulation.”

Michel said the framework was not created to give the EU a competitive advantage over other financial hubs, “but to unleash the power of innovation through trust”.

“It will help us develop a strong crypto ecosystem, because we have a lot of talent in Europe who understand that the next wave of innovation will be web3,” he said.

Europeum, the EU’s blockchain for Europe

The EU also plans to develop “concrete” blockchain applications in 2024, with the creation of “Europeum”, a blockchain for Europe.

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This will concentrate on the exchange of data relating to the block’s citizens, such as driving licences, identity cards and property deeds.

“Belgium will have the EU presidency in 2024, and one of my goals then will be to transform the European blockchain concept from a technical project to a political project, to create concrete applications for the blockchain, pioneering digital wallets and digital identity,” Michel Michel . so.

He added: “I have proposed the idea of ​​a European blockchain, called Europeum, for digital payments and smart contracts. The need for a European blockchain arises from concerns over the dependence on foreign technology providers and the potential risks associated with it. It would have several advantages .

Read more: Philip Hammond warns of “real risk” to London’s financial services from the EU’s crypto bill

“First, it would offer greater control and independence over digital payments and smart contracts, ensuring that the EU is not dependent on foreign suppliers for critical infrastructure.

“In addition, a European blockchain can provide greater security and privacy for transactions, as well as offering benefits such as transparency and efficiency.

“Furthermore, the use of a European blockchain can facilitate cross-border transactions and data sharing within the EU, reduce the complexity and cost of cross-border payments and enable greater interoperability between different systems.

“Identity cards, passports or property titles can all be distributed on a blockchain, which will bring great value, with the greatest value in the data itself. The data of each individual citizen, such as property titles and driver’s licenses and so on, can be safely exchanged on a regulated blockchain. “

He said: “Work has already begun on this blockchain, with the European Blockchain Services Infrastructure (EPSI) project existing right now in Europe.

“EBSI is a permissioned blockchain, meaning only authorized parties can participate in the network, making it more secure and suitable for sensitive applications such as public authentic sources.

“In addition, EBSI runs on Proof of Authority (PoA), a consensus algorithm that requires much less energy consumption than the proof of work algorithm used by many public blockchains and aims to be blockchain agnostic.”

MiCA (Markets in Crypto Assets) regulatory framework

MiCA is a proposed regulatory framework for crypto-assets across the EU. The regulation will introduce requirements for, among other things, issuers, service providers and trading platforms to protect consumers and prevent market abuse.

Michel said that by offering a clear and comprehensive regulatory framework for cryptoassets, the EU would become an attractive destination for web3 talent and businesses.

Read more: The UK’s crypto hub could have “significant competitive advantages” over the EU, Revolut boss claims

“In addition, the EU has a large and well-established financial services market, making it an ideal location for crypto companies looking to expand their services beyond the crypto industry,” he said.

“The introduction of the MiCA regulation will bring crypto assets under the same regulatory umbrella as other financial instruments, making it easier for crypto companies to interact with the traditional financial sector.

“Furthermore, the EU already has a strong and proven commitment to data and consumer protection as well as the prevention of market abuse, which are additional competitive advantages in general, but which can equally attract web3 talent and companies to Europe.”

Michel said the combination of digitizing traditional assets on blockchains and artificial intelligence could pose a risk to existing financial systems.

“For example, the use of AI for economic decision-making can potentially exacerbate systemic risk in financial markets, especially if the AI ​​models are not well calibrated or are trained on biased or incomplete data.

“That’s why it’s important that policymakers and industry leaders work together to develop a framework for responsible AI and blockchain use, that takes into account potential risks and ensures that these technologies are used in ways that benefit society as a whole.”

Read more: The Bank of England presents new plans to regulate crypto

Winngie Technologies co-founder Ibrahim Ipek told Yahoo Finance UK: “While MiCA may not be a revolutionary regulation in terms of its capacity, its impact on several European countries provides leverage for the crypto industry.

“In addition, MiCA serves as the benchmark for all crypto regulations, similar to the GDPR privacy law. Other legislation will be based on MiCA and will implement additional regulation on top of it.

“MiCA provides a comprehensive package for all 27 EU member states. It creates a market abuse standard that can be used in all member states. Overall, MiCA provides a clear and comprehensive regulatory framework for cryptoassets in the EU. This helps reduce regulatory uncertainty and encourages innovation in the industry.

“However, there are still some parts of MiCA that need to be established more, such as those on decentralized finance (DeFi) and non-fungible tokens (NFT). Nevertheless, if we consider MiCA as a full package, it will be decisive in attracting new companies to Europe. As is often said, Europe is good for regulation but late for innovation, while the US is the place of innovation but late for regulation. MiCA can be proof of this.”

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