The president of the European Central Bank, Christine Lagarde, went before the European Parliament earlier last week to argue for increased regulation in the crypto space, with a specific focus on crypto staking, which in her opinion, its severely lacking.
Crypto-assets and decentralized finance have the potential to pose real risks to financial stability. For the moment, the links between the private-sector crypto assets and traditional finance remain still limited.
Christine Lagarde Says Implementing Crypto Staking Regulation Will Take A Long Time
The current framework for crypto regulation – Markets in Crypto-Assets (MiCA), which has been proposed in 2018 and approved in 2020, is focused on regulating banks and companies which offer crypto services, but does not apply to decentralized systems. This is something that Lagarde hopes to fix in future legislation, which she dubbed MiCA II.
MiCA II should regulate the activities of crypto-asset staking and lending, which are definitely increasing.
However, it was also noted that this type of crypto staking regulation is still a long way away, considering how fast the crypto market is moving, and is not expected at least until 2024.
It is also worth noting that Lagarde is known for her negative opinions about cryptocurrencies, frequently mentioning them as being “worth next to nothing”.
Image courtesy of The Wall Street Journal (WSJ)