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The European Securities and Markets Authority (ESMA) has unveiled proposed regulations that would impose restrictions on cryptocurrency companies headquartered outside the European Union (EU) seeking to serve customers within the bloc. The move is aimed at preventing unfair competition and comes in the wake of the EU’s historic endorsement of the Markets in Crypto Assets (MiCA) regulations last year, making it the first jurisdiction to establish a comprehensive regulatory framework for cryptoassets like bitcoin.
While MiCA is set to come into full effect at the end of this year, ESMA, in a warning issued last year, emphasized that “retail investors must be aware that there will be no such thing as a ‘safe’ cryptoasset,” underlining the inherent risks associated with this emerging asset class.
The latest proposal by ESMA focuses on crypto asset firms based outside of Europe that intend to offer services to European customers. The regulatory guidance emphasizes that such services are limited under MiCA, and any exemptions granted should be viewed as narrow exceptions. The proposal clarifies that the provision of crypto-asset services by a third-country firm is acceptable only when the client exclusively initiates the service, cautioning against attempts to bypass MiCA.
This development coincides with global discussions on crypto regulations, particularly in the United States, where there is growing optimism within the crypto industry about the possibility of adopting stablecoin regulations this year. Industry figures, such as Jeremy Allaire, CEO of USD Coin stablecoin issuer Circle, have noted the accelerating pace of crypto regulations worldwide, with the U.S. showing a greater likelihood of approving new stablecoin laws than in the past. Allaire stressed the urgency of asserting U.S. leadership and implementing consumer protections in the rapidly evolving landscape of digital currencies.
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