Cryptocurrency regulation is the elephant in the room that will need to be addressed at some point, according to Montserrat Farina, Executive Director, Regulatory Affairs, Business and Investment, JP Morgan.
At the European Virtual Conference on Technology and Innovation of the Association for Financial Markets in Europe (AFME), Farina pointed out that the market capitalizations are around two trillion, which is quite a large size.
Against the backdrop of the growing growth of distributed ledger (DLT) technology and in the wake of recent market developments, panelists discussed regulatory priorities in the area of digital assets.
Farina said: “For the industry, the concept of implementing technology neutrality as well as achieving legal certainty and regulatory clarity are of the utmost importance. “
Etay Katz, Ashurst partner, said: “I would like to congratulate the bold European initiative on digital assets. It is very ambitious and it is perhaps precisely the approach that is needed.
Katz identified two main areas in this space: the issue of taxonomy and also large-scale adoption. He explained, “In a world where people tend to confuse and confuse crypto assets, there is a fundamental lack of clarity around assets, and this is where the market taxonomy of crypto asset regulation ( MiCA) is very useful. “
“The focus needs to be put fairly quickly on facilitating wholesale market transformation, knowing of course that policymakers are trying to do the impossible job of protecting consumers by protecting markets and the system itself – all of this. the same time. ”
Madeline Taylor, Senior Partner, Technology and Operations, AFME Policy, explained that in recent years, the industry has seen the maturation of tokenized securities markets and interesting proofs of concept.
However, the most recent trend observed by Taylor is the increased interest in cryptocurrencies and decentralized finance, which are protocols that allow the removal of intermediaries in financial services.
Taylor reflected: “There has been the development of public and private forms of money based on DLT, but I wonder if this is really an exciting new kind of development or just a current trend. . “
Katz noted, “This is indeed an exciting topic in the context of this conference. Digital money is an essential ingredient in transforming DLT capital markets, although it should not be seen as addictive. ”