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With crypto exchange FTX under multiple investigations in the wake of its bankruptcy filing on Friday (November 11, 2022), regulators around the world are reevaluating the way they look at digital asset regulation.
European Central Bank (EBCB) supervisory board chair Andrea Enriawarned that regulating crypto asset providers will be no easy task, according to a Sunday (November 13, 2022) Financial Timesreport.
“I am concerned for my colleagues that will have to perform this supervision in the future because these are animals with whom it is difficult to engage,” Enria said.
The European Union is currently in the process of finalizing crypto regulation legislation, known as Markets in Crypto-Assets, which will replace the current patchwork of national rules surrounding crypto trading and platform management.
“[It’s an] interesting challenge,” Enria said of the upcoming crypto asset legislation. “When you’re talking about risk management with [regulators], they have a different mindset. They think of IT security only; they never think about financial risks, so I don’t know how our toolbox will work with these types of animals.”
According to recent research report “Cryptocurrency, Blockchain and Cross-Border Payments: How Multinationals Leverage New Technology to Optimize Business Payments,” 58% of cross-border businesses use at least one cryptocurrency for transactions.
Regulating crypto transactions is essential for international businesses interactactions, with the ECB looking to find new ways to regulate crypto trading and payments driving that necessity forward.
On Monday (November 7, 2022), ECB raised concerns that Spain’s windfall tax could hit banks’ capital positions and end up increasing the cost of credit. The bank said at the time that it could “significantly reduce the repayment capacity of debtors.”
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