Upcoming cryptocurrency regulation in Europe could reduce the number of Web3 firms in the region and create new problems due to centralization.
The Market for Cryptoassets (MiCA) bill is the world's first comprehensive regulatory framework for #cryptocurrencies , and many see it as a positive for the industry.
While MiCA legitimizes the #cryptocurrency ecosystem, it also threatens the integration of cryptocurrency companies, said Anastasia Plotnikova, CEO and co-founder of Fideum, a company focused on institutional regulation and #blockchain infrastructure.
The compliance expert gave an exclusive interview to Cointelegraph during the European Blockchain Congress in Barcelona: I'm afraid that this will lead to consolidation of Western companies and they will move somewhere in the Middle East. The European Union has done a great job of harmonizing legislation, but enforcement depends on local and national authorities, and they differ a lot.
The MiCA framework affecting crypto-asset service providers is due to come into full force on December 30, and major European financial institutions are already preparing proposals on digital assets.
MiCA will make cryptocurrencies like TradFi.
Will SMEs suffer from consolidation? Compliance experts are optimistic about the European crypto industry, but are concerned about centralization and the possibility of small firms being taken over by large companies.
Plotnikova explains: It will lead to a lot of consolidation, VC practitioners and large crypto companies will also buy up talent and buy finished products. But that's the reality.
The bill will also bring the #web3 industry closer to traditional funding (TradFi) and make it harder for companies with limited funds to scale, she adds:
Cryptocurrencies are becoming more and more like TradFi. The more funds you have, the more assets under management, the easier it is to scale.
Some major banks are preparing to offer their digital assets for MiCA implementation.
Read us at: Compass Investments
