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4th September 2021 > > Europe.


tl;dr

Crypto regulation in Europe is better for being in a competitive environment.


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Since yesterday afternoon, the BTC price has stayed almost entirely above – just! – the $50k level. A small interregnum overnight was simply a reminder that the forces around this psychologically important level work both ways. Upward pressure will win out, we just do not know when.


Curious Cryptos’ Commentary – Crypto regulation within the EU

As president of the ECB, Lagarde’s ruminations on cryptos and Central Bank Digital Currencies (CBDCs) are unfortunately relevant to us, despite her criminal record.


Lagarde has stated that all cryptos, including stablecoins, “are not currencies at all”.


Spot trading of currencies is not subject to any regulation at all, a situation I have always found a little surprising.


Spot trading of securities is always subject to regulation.


Lagarde is trying to push cryptos down the latter route, which is patently obviously a very good thing.


She continued by explaining that she wants cryptos as assets to be regulated and “supervised by asset regulators”.


For once I find myself in complete agreement with Lagarde, a position with which I am desperately unfamiliar with, and I must admit it makes me feel somewhat uneasy.


For now, regulation of cryptos within the EU remains a national affair, with varying and very different approaches to date.


Germany has been very welcoming to crypto business. The regulators there have approved many forms of exchange traded products (ETPs) which, though not going as far as an exchange traded fund (ETF) does allow a regulated and custodially driven entry point for retail and institutional investors.


France meanwhile has taken an almost diametrically opposite approach, with discussions of an outright ban (though such a thing is frankly impossible) being vocalised.


I am all for this piecemeal approach – regulatory competition will always end up with a better outcome than some overarching top-down decision-making process. Lagarde – who has called for a global regulator of cryptos – and I find we are back once more in the familiar position of completely disagreeing with one another. We both feel better about that.


I remain quietly confident that as countries like France see the tax dollars accruing to countries like Germany, that common sense will prevail.

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