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Crypto regulation: Can the Ukrainian crisis accelerate everything?

In an extremely tense geopolitical context, the issue of crypto regulation is becoming hot in Europe today. Between the desire to act quickly without scaring crypto supporters too much, the European authorities find themselves faced with a dilemma. One question remains crucial: how far will it be acceptable to regulate digital assets? 

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A permanent sword of Damocles in the crypto market, regulation could accelerate in the coming weeks. With the guideline, the desire to limit the circumvention of economic sanctions by Russia.


Update On MiCA


A few days ago, Christine Lagarde, President of the European Central Bank, highlighted the importance of the rapid adoption of MiCA (Markets in Crypto Assets), a regulation aimed at supervising digital assets. Asked by a journalist about the possible use of cryptos as a means of circumventing sanctions, the president of the institution said the following:

There are always criminal ways to try to circumvent a ban, which is why it is so important that  MiCA is passed as soon as possible so that we have a regulatory framework.

Initially scheduled for February 28, the vote on the MiCA law was finally postponed at the request of a German deputy: Stefan Berger. On the grounds, according to him, this attempt at regulation could be interpreted by markets and users as an outright ban.

Finally, the vote on this European regulation should take place within 2 to 4 weeks. A deadline was extended due to a paragraph that suggested the prohibition of digital assets operating on the principle of Proof of Work. A protocol notably used by Bitcoin.

Bitcoin, Banned By MiCA?


If the text has leaked, it has been widely commented on, on social networks. At first, users feared that this text was a pretext for banning Bitcoin by 2025. What Stefan Berger wanted to clarify:

As rapporteur, it is essential for me that the MiCA directive is not misinterpreted as a de facto ban on Bitcoin.

In its latest version, the MiCA bill no longer includes the contentious paragraph. Overall, this text also raises the question of the centralization of a market that claims to be openly decentralized.

What Impact On The Price Of BTC?


In any case, the Bitcoin price continues to ride the uptrend. For many observers, the bullish rally of the last few days (+30% compared to the low point of February 24; +18% compared to the price of February 28) would be partly supported by the Russian population which is buying the asset massively.

Over the day, the BTC posted a gain of 2.74% to appear just above $45,000, a level not reached for 1 month. It outperformed the crypto market as a whole which posted an increase of 1.94%. At the same time, the price of Ethereum evolves by 1.91%. Other altcoins are also having a mixed day. Terra (LUNA) continues to soar with gains of +6.47%, Solana is in good shape (+3.74%) while the XRP token of the eponymous project is down almost 2%.

The EU: Between Firmness Against Russia And Flexibility For The Crypto Market


On the MiCA file, it would therefore seem that the European authorities are walking on eggshells. Torn between the desire to act quickly and the desire not to limit a booming sector too much.

Be that as it may, despite the modification of the contentious points, Christine Lagarde retains the same priority: that of rapid adoption of the text.

Whenever there is a ban or a mechanism in place to boycott or ban, there are always criminal means that will try to circumvent the ban or ban (…) It is therefore of crucial importance that [ the MiCA Act be pushed as quickly as possible so that we have a regulatory framework in which crypto-assets can effectively be captured.

An element that would limit the circumvention of sanctions by Russia. The text should be voted on within 2 to 4 weeks.

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