Markets

Europe’s stablecoin laws are in place – here are six key concerns as MiCA launches – DL News

Published

10 months ago

28 June, 2024

FinCrypt Staff

Europe's stablecoin laws are in place – here are six key concerns as MiCA launches – DL News

MiCA Summary

Stablecoin laws come into force for European markets on Sunday.
Exchanges are delisting non-compliant stablecoins.
Experts expect instability and confusion in the market.

Four years ago, the European Union decided to regulate crypto markets with a package of digital financial accounts.

Now, on Sunday, the Crypto Asset Markets regulation stablecoin rules will come into effect.

Although this first installment of MiCA rules represents a historic milestone, the cryptocurrency industry is concerned that a period of transformation is beginning.

Token issuers and cryptocurrency platforms will need to adjust to burdensome payments licenses, reserve requirements, and the loss of non-compliant tokens.

“These factors can lead to short-term instability and market confusion as the ecosystem adapts to the new regulatory environment,” said Laura Chaput, head of regulatory compliance at Keyrock, a market maker.

Here’s a helpful summary of the MiCA situation, plus how the industry and regulators are addressing six key points:

Tight deadline

The European Banking Authority is responsible for defining the implementation details of the MiCA stablecoin rules.

However, the EBA only issued its final guidance on 13 June.

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The tight schedule is “the biggest pressure point” for the industry, said Jón Egilsson, president and co-founder of electronic currency issuer Monerium. DL News.

An EBA spokesperson said DL News that the agency finalized and published all technical standards for which it was responsible before the deadline set on June 30.

He also continues to prepare for his future supervisory duties, the spokesperson said.

Exclusions

Stablecoins that do not comply with MiCA rules will be phased out from the EU.

The exclusions risk causing market disruptions, reduced options and liquidity issues, Chaput said.

Bitstamp will delist its euro-pegged stablecoin Tether, the exchange said Wednesday. OKEx delisted Tether for EU users in March.

Binance said it would restrict unauthorized stablecoins for EU users on some of its services, and Kraken said it was reviewing potential exclusions.

Electronic money license

MiCA defines e-money tokens as electronic money. This brings with it another European regulation, known as the Payment Services Directive.

The second iteration of this law – hence the nickname PSD2 – has been applied since 2016 and forces platforms that manage electronic money to comply with onerous requirements – more so than crypto asset platforms.

Getting a license can take years.

“We don’t know for sure whether stablecoins are electronic money,” said Victor Charpiat, an attorney at Kramer Levin Naftalis & Frankel LLP. “This has a big impact on your tax and accounting treatment.”

Charpiat raised concerns that the provision has not been formally clarified by regulators, and because few cryptocurrency companies hold a license under PSD2, companies will lose customers.

“Many digital asset service providers will potentially violate the law starting next Monday, and there is no way to know for sure because there is no clarification,” he said.

EBA regulators said they had called on industry to prepare “in a timely manner” for MiCA as soon as it became law a year ago, and provided tools to ask questions.

Whether a platform needs a payment service license for e-money token transactions depends on its activities, the EBA spokesperson said. “They would be licensed on a case-by-case basis.”

Permissionless networks

Some crypto service providers that operate and interact with networks without permission will not be able to comply with PSD2 requirements, said Tommaso Astazi, head of regulatory affairs at trade association Blockchain For Europe.

For example, the law requires payment platforms to protect funds received to execute payment transactions.

When users use self-hosted wallets or transfer on DeFi platforms between different blockchains, companies may not be able to custody assets the way PSD2 says they should, Astazi said.

Limits on stablecoins outside the euro

Issuers of non-euro-denominated stablecoins or stablecoins backed by multiple assets are limited.

These issuers need to limit themselves to a volume of 200 million euros per day or one million transactions when the token is used as a “medium of exchange,” according to MiCA.

“Imposing volume limitations on US dollar-backed stablecoins could lead to a shift towards euro-backed alternatives, impacting the dynamics of the stablecoin market,” Chaput said.

There are significant exceptions to the limits, the EBA clarified in its implementation reports, allaying some industry concerns.

They do not count when the stablecoin is used for trading, as collateral for financial instrument transactions, or used to settle a derivative.

Issuers can also ignore the limits if they have “reasonable grounds” to assume that the transaction is not to pay for goods or services, according to the EBA. report.

Local reservations

MiCA requires stablecoin issuers to hold 30% of cash reserves in EU bank accounts, or 60% for significant e-money tokens.

These reserves need to be divided between several local banks to mitigate concentration risk.

“This will deal a more immediate blow than strict limits on the use of dollar-denominated stablecoins in the EU,” Hugo Coelho, digital asset regulation lead at the Cambridge Center for Alternative Finance, and Mike Ringer, partner at law firm CMS, said. recently he wrote.

This is a challenge because there are few banks that agree to issuers of crypto banking. And because it is expensive, it means that the funds cannot be used to invest in safe assets.

For Egilsson, this provision nullifies the cryptocurrency’s original promise to operate independently of the banking system.

Crypto’s opportunity is not to depend on bank solvency, he said DL News in March.

“We can work with that. It’s not a problem,” he said. “But in the future, this is an issue that needs to be addressed.”

Inbar Preiss is a regulatory correspondent for DL News. Have a tip? Email her at inbar@dlnews.com.

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Markets

Crypto Markets Rebound as Spot Bitcoin ETFs Attract Massive Inflows

Published

9 months ago

17 July, 2024

FinCrypt Staff

Crypto Markets Rebound Ahead of Early Ethereum ETF Approval

This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.

Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).

The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.

Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.

Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.

Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.

Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.

Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.

U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.

Source

Markets

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Published

9 months ago

17 July, 2024

FinCrypt Staff

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.

Worldcoin (WLD) Price Analysis

O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.

The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.

Arweave (AR) Price Analysis

Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.

AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.

Price Analysis of Injective (INJ)

Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.

INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.

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Markets

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Published

9 months ago

17 July, 2024

FinCrypt Staff

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.

ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.

ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment

Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.

According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.

On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.

The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.

Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.

One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.

Source

Markets

Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt

Published

9 months ago

17 July, 2024

FinCrypt Staff

Bits + Bips: How to Play the ‘Trump Trade’ in Crypto After the Assassination Attempt

Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?

Posted on July 17, 2024 at 12:00 PM EST.

Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.

They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?

They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).

Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?

Program Highlights:

Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
What are the new updates about Ethereum ETFs and their expected launch?
Why Solana Hasn’t Performed Significantly Better Since Trump News
What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week