EU lawmakers urge assessing DeFi, staking, NFT regulation

The European Parliament's economical affairs committee has urged the European Commission to measure whether crypto lending and borrowing, staking, non-fungible tokens (NFTs) and decentralized concern (DeFi) should beryllium regulated.

The recommendations were portion of a study tabled Friday for plenary vote. It besides called for promoting tokenization crossed fiscal services, encouraging euro-denominated stablecoins and assessing whether further crypto activities should beryllium regulated nether the European Union’s Markets successful Crypto-Assets Regulation (MiCA).

Drafted by Belgian Member of the European Parliament Johan Van Overtveldt, the study is an own-initiative solution by the Committee connected Economic and Monetary Affairs (ECON) that outlines recommendations for the Commission connected integer plus regulation. 

It volition adjacent spell earlier the European Parliament for a vote, expected July 7. If adopted, the solution would go Parliament's authoritative presumption connected integer assets argumentation but would not amend MiCA oregon make caller ineligible obligations.

The legislative timeline shows the committee's support of the study and its referral for a plenary vote. Source: European Parliament

Related: European Parliament throws enactment down integer euro

EU warms up to regulated stablecoins

The recommendations besides bespeak an evolving presumption of stablecoins among policymakers. Days aft erstwhile Bank for International Settlements wide manager and longtime crypto professional Agustín Carstens softened his stance connected stablecoins, the study welcomed euro-denominated stablecoins nether MiCA and encouraged their improvement to enactment the bloc's outgo sector.

In 2023, Van Overtveldt called for tighter restrictions connected cryptocurrencies pursuing the banking turmoil surrounding Silicon Valley Bank, Signature Bank and Silvergate Bank. The situation was besides intimately tied to stablecoins, arsenic USDC issuer Circle held astir $3.3 cardinal of its reserves astatine Silicon Valley Bank erstwhile it collapsed, concisely causing USDC to suffer its dollar peg.

Van Overtveldt likened cryptocurrencies to drugs during the 2023 banking crisis. Source:Johan Van Overtveldt

The study argued that euro-denominated stablecoins could complement tokenized commercialized slope deposits and wholesale cardinal slope integer currencies portion enabling faster and cheaper cross-border payments. It besides said broader adoption could fortify the competitiveness of EU fiscal markets and the planetary relation of the euro.

The stance besides aligns with ECON’s broader imaginativeness for Europe’s integer wealth ecosystem. On Tuesday, the committee backed authorities for a integer euro, with lawmakers arguing that nationalist and backstage forms of integer wealth should coexist alternatively than compete.

Related: Poland president vetoes MiCA measure again arsenic crypto companies look to licence abroad

Lawmakers look beyond MiCA's existent scope 

Van Overtveldt archetypal presented a draft of the study successful February earlier months of negotiations and amendments by ECON members. The earlier mentation mostly focused connected MiCA's existing framework, including stablecoin classifications and ineligible certainty for multi-issued stablecoins.

The committee-approved study urged accordant exertion of MiCA crossed the EU to sphere a level playing tract for crypto firms. It besides warned subordinate states against introducing nationalist requirements beyond MiCA that could fragment the bloc's integer plus industry.

The Commission is already reviewing MiCA. In May, the Commission launched a nationalist consultation seeking feedback connected whether the model should beryllium expanded to screen areas including DeFi, staking, lending, NFTs and tokenized fiscal assets, portion besides reopening statement implicit the regulation's prohibition connected interest-bearing stablecoins.

Meanwhile, MiCA's transitional play ends July 1, aft which crypto plus work providers mostly indispensable clasp authorization nether the regularisation to proceed operating crossed the EU.

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