Markets
EU stablecoin laws take effect – here are six key concerns as MiCA rolls out – DL News
MiCA Overview
- Stablecoin laws will go live on European markets on Sunday.
- Exchanges delist stablecoins that are not compliant.
- Experts expect market instability and confusion.
Four years ago, the European Union moved to regulate crypto markets with a set of digital finance bills.
Now, on Sunday, the stablecoin rules of the Cryptoasset Markets Regulation will come into force.
Even though this first tranche of MiCA rules marks a historic milestone, the crypto industry is concerned about the start of a period of transformation.
Token issuers and crypto platforms will need to adapt to onerous payment licenses, reserve requirements, and the loss of non-compliant tokens.
“These factors could lead to near-term instability and market confusion as the ecosystem adapts to the new regulatory environment,” said Laura Chaput, head of regulatory compliance at Keyrock, a market maker.
Here’s a practical overview of where MiCA stands, as well as how the industry and regulators are addressing six key points:
Tight deadline
The European Banking Authority is tasked with fine-tuning the implementation details of MiCA’s stablecoin rules.
However, the EBA did not publish its final guidance until 13 June.
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The tight timing is “the biggest pressure point” for the industry, said Jón Egilsson, chairman and co-founder of e-money issuer Monerium. DL News.
An EBA spokesperson said DL News that the agency finalized and published all technical standards for which it was responsible by the June 30 deadline.
She also continues to prepare for her upcoming supervisory duties, the spokesperson said.
Radiation
Stablecoins that do not comply with MiCA rules will be gradually removed from the EU.
Delistings risk causing market disruption, reduced options and liquidity issues, Chaput said.
Bitstamp will delist Tether’s euro-denominated stablecoin, the exchange announced Wednesday. OKX delisted Tether from EU users in March.
Binance said it would restrict unauthorized stablecoins for EU users in some of its services, and Kraken said it was reviewing potential delistings.
Electronic Money License
MiCA defines e-money tokens as electronic money. This brings with it another European regulation, known as the Payment Services Directive.
The second iteration of this law – hence the nickname PSD2 – has been in force since 2016 and requires platforms managing electronic money to comply with onerous requirements – even more so than crypto asset platforms.
Getting a license could take years.
“We don’t know for sure whether stablecoins are electronic money,” Victor Charpiat, an attorney at Kramer Levin Naftalis & Frankel LLP. “That has a major impact on their tax and accounting treatment.”
Charpiat expressed concern that the provision has not been formally clarified by regulators and that, with few crypto businesses licensed under PSD2, companies will lose customers.
“Many digital asset service providers could be breaking the law starting next Monday, and there is no way to be sure because there is no clarification,” he said.
EBA regulators said they called on the industry to prepare “in a timely manner” for MiCA once it became law a year ago, and provided tools for asking questions.
Whether a platform needs a payment service license for e-money token transactions depends on its activities, the EBA spokesperson said. “They would be authorized on a case-by-case basis. »
Permissionless networks
Some crypto asset service providers operating and interacting with networks without authorization will not be able to comply with PSD2 requirements, said Tommaso Astazi, head of regulatory affairs at trade association Blockchain For Europe.
For example, the law requires payment platforms to protect funds received for the execution of payment transactions.
When users use self-hosted wallets or make transfers to DeFi platforms on different blockchains, businesses may not be able to custody assets as PSD2 intended, Astazi said.
Ceilings for non-euro stablecoins
Issuers of non-euro denominated or multi-asset backed stablecoins are capped.
These issuers must stick to a volume of 200 million euros per day or one million transactions when the token is used as a “means of exchange,” according to MiCA.
“Imposing volume limitations on US dollar-backed stablecoins could lead to a shift to euro-backed alternatives, impacting stablecoin market dynamics,” Chaput said.
There are important exceptions to the thresholds, the EBA clarified in its implementation reports, putting to rest some of the industry’s concerns.
They do not count when the stablecoin is used for trading purposes, as collateral for transactions with financial instruments or used to settle a derivative product.
Issuers can also ignore the thresholds if they have “reasonable grounds” to assume that the transaction is not intended to pay for goods or services, according to the EBA. report.
Local reserves
MiCA requires stablecoin issuers to hold 30% of cash reserves in EU bank accounts, or 60% for large e-money tokens.
These reserves must be spread across several local banks to mitigate concentration risk.
“This will be a more immediate blow than the strict limits on the use of dollar-denominated stablecoins within the EU,” Hugo Coelho, head of digital asset regulation at the Cambridge Centre for Alternative Finance, and Mike Ringer, a partner at law firm CMS, said recently. wrote.
This is a challenge because few banks are willing to use cryptocurrency issuers. And because it is expensive, because it means the funds cannot be used to invest in safe assets.
For Egilsson, this provision undermines the initial promise of cryptocurrencies to operate independently of the banking system.
The opportunity for cryptocurrency is not to depend on the solvency of the bank, he said DL News in March.
“We can work with that. It’s not an obstacle,” he said. “But going forward, this is a problem that will need to be resolved.” »
Inbar Preiss is a legal correspondent at DL News. Do you have a tip? Send him an email at inbar@dlnews.com.
Over the past 24 hours, Jupiter and JasmyCoin emerged as the top gainers among the top 100 crypto assets, while Bittensor and Mantra plunged as the top losers.
Top Winners
Jupiter
Jupiter (JUP) led the charge among the biggest gainers on July 27.
At the time of writing, the crypto asset had surged 12.6% in the past 24 hours and was trading at $1.16. JUP’s daily trading volume was hovering around $282 million, according to data from crypto.news.
JUP Hourly Price Chart, July 26-27 | Source: crypto.news
Additionally, the cryptocurrency’s market cap stood at $1.56 billion, making it the 62nd largest crypto asset, according to CoinGecko. Despite the recent price surge, the token is still down 42.6% from its all-time high of $2 reached on Jan. 31.
Jupiter functions as a decentralized exchange aggregator that allows users to trade Solana-based tokens. The platform also offers users the best routes for direct trades between multiple exchanges and liquidity pools.
In addition to being a DEX aggregator, Jupiter has expanded into a “full stack ecosystem” by launching several new projects, including a dedicated pool to support perpetual trading and plans for a stablecoin.
JasmyCoin
JasmyCoin (JASMI) has increased by 12% in the last 24 hours and is trading at $0.0328 at press time. JASMY’s daily trading volume has increased by 10% in the last 24 hours, reaching $146 million.
JASMY Hourly Price Chart, July 26-27 | Source: crypto.news
The asset’s market cap has surpassed the $1.5 billion mark, making it the 60th largest cryptocurrency at the time of reporting. However, the self-proclaimed “Bitcoin of Japan” is still down 99.3% from its all-time high of $4.79 on February 16, 2021.
JASMY is the native token of Jasmy Corporation, a Japanese Internet of Things provider. The platform seeks to merge the decentralization of blockchain technology with IoT, allowing users to convert their digital information into digital assets.
The initiative was launched by Kunitake Ando, former COO of Sony Corporation, along with Kazumasa Sato, former CEO of Sony Style.com Japan Inc., Hiroshi Harada, executive financial analyst at KPMG, and other senior executives from Japan.
Kaspa
Kaspa (KAS) saw a 100% increase in trading volume and an 8% increase in price over the past 24 hours, trading at $0.19 at the time of publication.
KAS Hourly Price Chart, July 26-27 | Source: crypto.news
According to data from CoinGecko, Kaspa now ranks 27th in the global cryptocurrency list, with a circulating supply of approximately 24.29 billion KAS tokens and a market capitalization of $4.59 billion.
Kaspa is a cryptocurrency designed to deliver a high-performance, scalable, and secure blockchain platform. Its unique Layer-1 protocol includes the GhostDAG protocol, a proof-of-work (PoW) consensus mechanism that enables faster block times and higher transaction throughput compared to standard blockchains.
Unlike Bitcoin, GhostDAG allows multiple blocks to be created simultaneously, speeding up transactions and increasing block rewards for miners.
Bonk
Bonk (BONK) is the only one coin meme which made it to this list of biggest gainers and jumped 8.6% in the last 24 hours. Trading at $0.000030, the Solana-based meme coin’s market cap has surpassed $2.1 billion, surpassing Floki (FLOKI), another competing dog-themed coin with a market cap of $1.78 billion.
BONK Hourly Price Chart, July 26-27 | Source: crypto.news
BONK’s daily trading volume hovered around $285 million. However, BONK is still down 33.5% from its all-time high of $0.000045, reached on March 4.
Bonk, a meme coin that rose to prominence in 2023, has contributed significantly to Solana’s value increase amid the meme coin frenzy.
Bonk started out as a simple dog-themed coin. It has since expanded its features to include integration with decentralized finance. The project also partners with cross-chain communication protocols, NFT marketplaces, and various other cryptocurrency ecosystems.
BONK trading pairs are now listed on major exchanges including Binance, Coinbase, OKX, and Bitstamp.
The big losers
Bittensor
Bittensor (TAO) was the biggest loser among the 100 largest crypto assets, according to data from CoinGecko.
At the time of writing, TAO, the native token of decentralized AI project Bittensor, was down 5%, trading around $344. The crypto asset had a daily trading volume of $59 million and a market cap of $2.43 billion.
TAO 24 Hour Price Chart | Source: CoinGecko
Bittensor, created in 2019 by AI researchers Ala Shaabana and Jacob Steeves, initially operated as a parachain on Polkadot before transitioning to its own layer-1 blockchain in March 2023.
Mantra
Mantra (OM) fell 6%, trading at $1.13 at press time. The digital currency’s market cap fell to $938 million. Additionally, the 82nd largest crypto asset has a daily trading volume of $26 million.
OM Price Hourly Chart, July 26-27 | Source: crypto.news
Mantra is a modular blockchain network comprising two chains, Manta Pacific and Manta Atlantic, specialized in zero-knowledge applications.
Coat
Coat (MNT) also saw a 2.4% drop in price, now trading at $0.8413. Currently, Mantle has a market cap of around $2.75 billion, which ranks 36th in the global cryptocurrency rankings by market cap, according to price data from crypto.news.
MNT Hourly Price Chart, July 26-27 | Source: crypto.news
Over the past 24 hours, MNT trading volume also fell by 6%, reaching $240 million.
Mantle, formerly known as BitDAO, is an investment DAO closely associated with Bybit. The MNT token is essential for governance, paying gas fees on the Mantle network, and staking on various platforms.
Built on the Ethereum network, Mantle provides a platform for decentralized application developers to launch their projects. It has become particularly popular for GameFi applications, leading to the formation of an internal Web3 gaming team.
Markets
Bitcoin Price Drops to $67,000 Despite Trump’s Pro-Crypto Comments, Further Correction Ahead?
Pioneer cryptocurrency Bitcoin has registered a 1.13% decline in the past 24 hours to trade at $67,400. Despite a strong pro-crypto stance from US presidential candidate Donald Trump at the Bitcoin 2024 conference, this massive selloff has raised concerns in the market about the asset’s sustainability at a higher price. However, given the recent three-week rally, a slight pullback this weekend is justifiable and necessary to regain the depleted bullish momentum.
Bitcoin Price Flag Formation Hints at Opportunity to Break Beyond $80,000
The medium-term trend Bitcoin Price remains a sideways trend amidst the formation of a bullish flag pattern. This chart pattern is defined by two descending lines that are currently shaping the price trajectory by providing dynamic resistance and support.
On July 5, BTC saw a bullish reversal from the flag pattern at $53,485, increasing its asset by 29.75% to a high of $69,400. This recent spike followed the market’s positive sentiment towards the Donald Trump speech at the Bitcoin 2024 conference in Nashville on Saturday afternoon.
Bitcoin Price | Tradingview
In his speech, Trump outlined several pro-crypto initiatives: he promised to replace SEC Chairman Gary Gensler on his first day in office, to establish a Strategic National Reserve of Bitcoin if elected, to ensure that the U.S. government holds all of its assets. Bitcoin assets and block any attempt to create a central bank digital currency (CBDC) during his presidency.
He also claimed that under his leadership, Bitcoin and cryptocurrencies will skyrocket like never before.
Despite Donald Trump’s optimistic promises, the BTC price failed to reach $70,000 and is currently trading at $67,400. As a result, Bitcoin’s market cap has dipped slightly to hover at $1.335 trillion.
However, this pullback is justified, as Bitcoin price has recently seen significant growth over the past three weeks, which has significantly improved market sentiment. Thus, price action over the weekend could replenish the depleted bullish momentum, potentially strengthening an attempt to break out from the flag pattern at $70,130.
A successful breakout will signal the continuation of the uptrend and extend the Bitcoin price forecast target at $78,000, followed by $84,000.
On the other hand, if the supply pressure on the upper trendline persists, the asset price could trigger further corrections for a few weeks or months.
Technical indicator:
- Pivot levels: The traditional pivot indicator suggests that the price pullback could see immediate support at $64,400, followed by a correction floor at $56,700.
- Moving average convergence-divergence: A bullish crossover state between the MACD (blue) and the signal (orange) ensure that the recovery dynamics are intact.
Related Articles
Frequently Asked Questions
A CBDC is a digital form of fiat currency issued and regulated by a country’s central bank. It aims to provide a digital alternative to traditional banknotes.
The proposal for a strategic national Bitcoin reserve is a major confirmation of Bitcoin’s legitimacy and potential as a reserve asset. Such a move could position Bitcoin in a similar way to gold, potentially stabilizing its price and encouraging other countries to adopt similar strategies.
Conferences like Bitcoin 2024 serve as essential platforms for networking, knowledge sharing, and showcasing new technologies within the cryptocurrency industry.
Markets
Swiss crypto bank Sygnum reports profitability after surge in first-half trading volumes – DL News
- Sygnum says it has reached profitability after increasing transaction volumes.
- The Swiss crypto bank does not disclose specific profit figures.
Sygnum, a Swiss global crypto banking group with approximately $4.5 billion in client assets, announced that it has achieved profitability after a strong first half, with key metrics showing year-to-date growth.
The company said in a Press release Compared to the same period last year, cryptocurrency spot trading volumes doubled, cryptocurrency derivatives trading increased by 500%, and lending volumes increased by 360%. The exact figures for the first half of the year were not disclosed.
Sygnum said its staking service has also grown, with the percentage of Ethereum staked by customers increasing to 42%. For institutional clients, staking Ethereum has a benefit that goes beyond the limitations of the ETF framework, which excludes staking returns, Sygnum noted.
“The approval and launch of Bitcoin and Ethereum ETFs was a turning point for the crypto industry this year, leading to a major increase in demand for trusted, regulated exposure to digital assets,” said Martin Burgherr, Chief Client Officer of Sygnum.
He added: “This is also reflected in Sygnum’s own growth, with our core business segments recording significant year-to-date growth in the first half of the year.”
Sygnum, which has also been licensed in Luxembourg since 2022, plans to expand into European and Asian markets, the statement said.
Markets
Former White House official Anthony Scaramucci says cryptocurrency bull market could be sparked by regulatory clarity
Anthony Scaramucci, founder of Skybridge Capital, says the next cryptocurrency bull market could be sparked by a new wave of clear cryptocurrency regulations.
In a new interview On CNBC’s Squawk Box, the former White House communications director said he and two other prominent industry figures traveled to Washington, D.C. to speak to officials about the dangers of Sen. Elizabeth Warren and U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s hardline approach to cryptocurrency regulation.
“Mark Cuban, myself, and Michael Novogratz were in Washington a few weeks ago to speak with White House officials and explain the dangers of Gary Gensler and Elizabeth Warren’s anti-crypto approach. I hope that message gets through…
“Overall, if we can get regulatory policy around Bitcoin and crypto assets in sync, we will have a bull market next year for these assets.”
Scaramucci then compares crypto assets to ride-hailing company Uber, saying regulators were initially wary of the service but eventually decided to adopt clear guidelines due to public demand.
“Remember Uber: Nobody wanted Uber. A lot of regulators didn’t want it. Mayors and deputy mayors didn’t want it, but citizens wanted Uber and eventually accepted the idea of regulating it fairly. I think we’re there now.”
The CEO also says young Democratic voters believe their leaders are making the wrong choices when it comes to digital assets.
“I think President Trump’s move toward Bitcoin and crypto assets has shaken Democrats to their core, and I think very smart, younger Democrats are recognizing that they are completely off base with their positions, completely off base with these SEC lawsuits and regulation by law enforcement, and now they need to get back to the center.”
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