EU lawmakers still don’t get crypto, and this is bad for the EU
EU lawmakers ⚖️ continue their efforts in tackling crypto, but so far they are quite unsuccessful.
In the past two weeks we saw three crypto-related decisions taken in Brussels:
? On October 4th a (non-binding) resolution concerning crypto taxes was adopted by the EU Parliament.
It called suggested a uniformed definition of crypto and “taxable event” (which the resolution authors recommended to be crypto-to-fiat conversion), underlying the importance of “knowing where the taxable event took place”.
? On October 5th, the EU Council approved the text of MiCA, which introduced a $200 million and 1’000’000 transaction cap on daily transaction volume of non-euro stablecoins “used as means of exchange”. The issuers of such stablecoins, upon noticing a quarterly average above this threshold, will have to ensure its “reduction”.
? On October 6th, the EU Council adopted another package of sanctions against russia, which included the ban of “all crypto-asset wallets, accounts, or custody services”, cancelling the previous cap of $10k.
What seems to be the problem?
?♀️ The EU continues to apply old-world methods to a new type of asset, trying hard to put it into specific centralized channels, on which it can impose its requirements.
The only thing this could entail, though, is people turning to other channels, switching from centralized exchanges to DEXes and non-custodial wallets. The most conservative ones might also use the services of various middleman.
?♀️ Such inconsiderate approach will not help the EU collect more taxes from its citizens (even if one might say this isn’t possible anymore ?), nor “protect” the euro or impose hardship on the russians. It will, however, stifle the development of the EU crypto industry, which will be buried under a myriad of reporting obligations (most of which will be symbolic).
Limiting the dollar-pegged stablecoins use to a laughable $200 million (only Tether’s daily volume is $31.6 billion) will soon confront the EU-based centralized crypto services with problems settling transactions.
Will it help euro-pegged stablecoins? Not so much, for MiCA authorizes their issuance only to “credit institutions” or “electronic money institution” (basically banks).
How much time would it take people in Brussels to learn what crypto is about and develop a truly appropriate regulation?
