Europe’s upcoming cryptocurrency regulatory framework could reduce the number of Web3 firms in the region and introduce new centralization-related concerns.
The Markets in Crypto-Assets (MiCA) bill is the world’s first comprehensive regulatory crypto framework, widely seen as a net positive for the industry.
While MiCA legitimizes the crypto ecosystem, it also threatens to introduce consolidation among crypto firms, according to Anastasija Plotnikova, CEO and co-founder of Fideum, a regulatory and blockchain infrastructure firm focused on institutions.
The regulatory compliance experts told Cointelegraph in an exclusive interview during the European Blockchain Convention in Barcelona:
“I'm afraid it will lead to consolidation between European and American companies, and they will just move somewhere to the Middle East. The European Union had has done amazing things in harmonising legislation, but enforcement comes down to local and national authorities and they vary greatly.”
Fideum’s Anastasija Plotnikova and Cointelegraph’s Zoltan Vardai
The MiCA framework impacting crypto-asset service providers is set to go into full effect on Dec. 30 and some large European financial institutions are already preparing their digital asset offerings.
Related: EU MiCA implementation a ‘pivotal moment’ for crypto regulations — Compliance exec
MiCA is making crypto “just like TradFi.” Will small firms suffer the most consolidation?
While the compliance expert remains optimistic about the European crypto industry, she remains concerned about centralization concerns and small firms being overpowered by the larger ones.
Plotnikova explained:
“It will lead to a lot of consolidation. It will be a lot more predatorial, even VC practices or larger crypto companies just buying the talent, buying this off the shelf. But it is what it is.”
The bill is also making the Web3 industry more akin to traditional finance (TradFi), as it will make it more difficult for firms with limited funds to scale, she added:
“Crypto is becoming just like a TradFi. The more money you have, the more assets under management, the easier it is to scale.”
Related: BlackRock Bitcoin ETF demands 12-hour BTC withdrawals from Coinbase
European banks like Societe Generale are preparing for the MiCA implementation
Some of the largest banks are already preparing their digital asset offering for the implementation of MiCA.
For instance, Societe Generale, the world’s 19th-largest banking group by assets, has partnered with Bitpanda to launch a MiCA-compliant stablecoin, the euro-denominated EUR CoinVertible (EURCV).
The partnership is a crucial step in making stablecoins a part of the wider financial system, according to Jean-Mark Stenger, CEO of Societe Generale-FORGE, who wrote:
“This partnership is a crucial step towards achieving our vision of making stablecoins a core component of the global financial system. Together with Bitpanda, we are confident in our ability to offer European users a stable, secure, and accessible digital currency."
In April, Germany’s largest federal bank, the Landesbank Baden-Württemberg, also announced that it would start offering crypto custody solutions through Bitpanda’s digital asset platform.
Magazine: Worldcoin fined again! Crypto store clerk runs off with $500K cash: Asia Express