Europe and stablecoins, start of mad love? – No one should ignore Mica (Markets in crypto assets), a plan responsible for framing the use of cryptocurrencies adopted at the beginning of October last year. At least with a few exceptions. Indeed, it is difficult to resist the temptation to use these digital currencies called stablecoins. So why wait? European market parties will soon be able to have fun thanks to a brand new pilot project. All the details.
Stablecoins, here we come!
In their tank filled with newly tokenized sand, European bankers will be able to try and manipulate an entirely new kind of asset. Tokenized Financial Products. Let’s not play with words, cryptos in short. Indeed, an entirely new initiative has been approved by the European Commission. This is the pilot plan DLT (Distributed Ledger Technology). Simply put, it is a transitional regulatory framework that allows certain market players to use distributed ledger technologies. Of the stable coinswhat.
This pilot will allow them to use stablecoins for interbank exchanges and settlements without waiting for MiCA to be implemented. A planned deployment at its best for 2024. So many wait for a new toy that is very desirable it must be said. Instant international transfers at a lower cost, hard to resist for a banker.
Players in traditional and digital finance will be able to experiment with these new types of exchanges within a regulated environment. This one, from March 2023 and for a period of 3 years, renewable once. It will also provide concrete insight into the use of distributed ledger technologies within financial markets for future mainstreaming.
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Crypto sandbox in European finance
Participants in the DLT pilot project will therefore be exempted from certain very specific elements of the financial services regulation. This concerns in particular the Markets in Financial Instruments Directive (MiFID) and the Central Securities Depositories Regulation (CSDR).
New entrants to the financial markets, who are not licensed for MiFID and CSDR, can also apply for the DLT project. The oldest bank in the United States, BNY Mellonwas particularly interested.
It has happened. Cryptocurrencies, or at least their stable counterpart, are now making their way into the highest echelons of European finance. Good or bad, time will tell. But the usefulness of the blockchain in interbank exchanges has long been known. It was indeed high time for Europe to address the subject. Small downside, given the enthusiasm, it is very surprising for the European Union that they do not yet have a euro stablecoin worthy of the name. Euro stablecoin currently issued by Circle, an American company….
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