Markets

European Stablecoin Laws Are Coming Into Effect: Here Are Six Key Concerns As MiCA Launches – DL News

Published

10 months ago

28 June, 2024

Financial Block Staff

European Stablecoin Laws Are Coming Into Effect: Here Are Six Key Concerns As MiCA Launches – DL News

MiCA Summary

Stablecoin laws will come into force on Sunday for European markets.
Exchanges are delisting stablecoins that are not compliant.
Experts expect instability and confusion in the market.

Four years ago, the European Union decided to regulate cryptocurrency markets with a series of digital finance bills.

The stablecoin rules of the Cryptocurrency Markets Regulation will come into force on Sunday.

While this first tranche of MiCA regulations marks a historic milestone, the cryptocurrency industry is concerned as a period of transformation is about to begin.

Token issuers and crypto platforms will have to adjust to burdensome payment licensing, reserve requirements and the loss of non-compliant tokens.

“These factors could lead to short-term instability and confusion in the market 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 current state of MiCA, as well as how industry and regulators are addressing six key issues:

Close deadline

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

However, the EBA only published its final guidelines on 13 June.

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

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

The agency also continues to prepare for the oversight tasks that lie ahead, the spokesperson said.

Cancellations

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

Chaput said the cancellations risk causing market disruption, reducing options and causing liquidity issues.

Bitstamp will delist Tether’s euro stablecoin, the exchange said on Wednesday. OKX delisted Tether for EU users in March.

Binance said it would restrict the use of unauthorized stablecoins for EU users in some of its services, while Kraken said it was evaluating potential delistings.

Electronic money license

MiCA defines e-money tokens as electronic money. This leads into another European regulation, known as the Payment Services Directive.

The second iteration of this law, hence the name PSD2, has been in force since 2016 and forces platforms that manage electronic money to comply with onerous requirements, more than cryptocurrency platforms do.

Getting licensed could take years.

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

Charpiat expressed concern that the provision has not been formally clarified by regulators, and since few cryptocurrency firms hold a license under PSD2, firms will lose customers.

“Many digital asset service providers may be violating the law starting next Monday, and there is no way to be sure because there is no clarification,” he said.

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

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

Unauthorized Networks

Some cryptocurrency 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 safeguard funds received for executing payment transactions.

When users use self-hosted wallets or transfer money on DeFi platforms between different blockchains, companies may not be able to custodian assets as required under PSD2, Astazi said.

Caps on non-euro stablecoins

Issuers of non-euro denominated stablecoins or multi-asset backed stablecoins are subject to a cap.

According to MiCA, these issuers must stick to a volume of 200 million euros per day or one million transactions when the token is used as a “medium of exchange.”

“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 thresholds, the EBA clarified in its implementation reports, putting to rest some industry concerns.

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

According to the EBA, issuers can also disregard the thresholds if they have “reasonable grounds” to believe that the transaction does not concern the payment for goods or services. relationship.

Local reserves

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

These reserves must be divided among different local banks to mitigate concentration risk.

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

This is a challenge because few banks agree to finance cryptocurrency issuers. And because it is expensive as this means that the funds cannot be used to invest in safe assets.

For Egilsson, this provision undermines the original promise of cryptocurrencies to operate independently of the banking system.

The desirability of cryptocurrencies does not depend on the solvency of the bank, he said DL News in March.

“We can work on it. It’s not a deciding factor,” he said. “But going forward, this is an issue that needs to be addressed.”

Inbar Preiss is a Regulation Correspondent at DL News. Do you have a suggestion? Email her at inbar@dlnews.com.

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Markets

Bitcoin, Ethereum See Red as Markets Crash on Volatility

Published

9 months ago

1 August, 2024

Financial Block Staff

Bitcoin, Ethereum See Red as Markets Crash on Volatility

Bitcoin AND Etherealalong with the rest of the top 10 cryptocurrencies by market cap, appear to be in hibernation on Thursday morning.

At the time of writing, the Bitcoin Price is still below $65,000 and 2.2% lower than it was this time yesterday, according to CoinGecko data. Things are worse for the Ethereum Pricewhich is 3.7% lower than 24 hours ago at $3,185.22. The drop in ETH’s price is identical to that of Lido Staked Ethereum (stETH), a liquid staking token for Ethereum.

In recent days, falling prices have led to the liquidation of derivative contracts worth $225 million, according to Coin glassAnd about half of that, about $100 million, was liquidated in the last 12 hours.

When a trader is liquidated, it means that their position in the market has been forcibly closed by an exchange or brokerage due to a margin call or insufficient collateral. Margin is especially important when it comes to leveraged positions, which allow traders to control a multiple of their deposit, such as opening a $10,000 position with only $1,000 in their account.

Now that Bitcoin has been in the red for three days in a row, there is a chance that the world’s oldest and largest cryptocurrency could sink even further, BRN analyst Valentin Fournier said in a note shared with Decrypt.

“Bitcoin has closed in the red for three days in a row, with one-way trading showing limited resistance from bulls. Ethereum had a slightly positive Monday with strong resistance from bears who have won the last two days,” he wrote. “This momentum could take BTC to the $62,500 resistance or even the $58,000 territories.”

Looking ahead, Fournier said BRN’s strategy will be to “reduce exposure to Bitcoin and Ethereum and find a better entry point after the dip.”

This is despite Federal Reserve Chairman Jerome Powell’s comments yesterday on interest rates being widely regarded as accommodating and indicative of FOMC rate cuts in September.

Singapore-based cryptocurrency trading firm QCP Capital said the rally in stocks, which sent the S&P 500 up 1.6% from Wednesday’s close, was not felt in cryptocurrency markets.

“Cryptocurrencies have seen a broad sell-off overnight and into this morning,” the firm wrote in a trading note. “The market remains poised as traders pay close attention to daily ETH ETF outflows and further supply pressure from Mt Gox and the US government.”

Meanwhile, the other top-ranking coins are showing mixed performance.

Solana (SOL) is down 7.2% since yesterday to $169.13. Things are even worse for its most popular meme coins. In the past 24 hours, the most popular meme coins Dogwifhat (WIF) are down 12% and BONK (BONK) is down 9%, according to CoinGecko data.

Their dog-themed competitor, Ethereum OG Dogecoin (DOGE), the only meme coin in Coingecko’s top 10, is down nearly 4% since yesterday and is currently trading at $0.1205.

XRP (XRP) dropped to $0.608, which is 7% lower than it was at this time yesterday.

Binance’s BNB Coin (BNB) has kept pace with BTC and is currently trading at $571, down 2.4% from yesterday. Toncoin (TON), the native token of The Open Network, is down just 0.4% over the past day.

This leaves the stablecoins USDC (USDC) and Tether (USDT), both of which are stable as they maintain their 1:1 ratio with the US dollar.

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Markets

XRP Market Activity Drops During Ripple-SEC Talks: Price Steady

Published

9 months ago

1 August, 2024

Financial Block Staff

Ripple (XRP) Market Witnesses Calm During SEC-Ripple Meeting

The Securities and Exchange Commission (SEC) will hold another closed-door meeting with Ripple on Thursday, as the market hopes for a possible resolution to the legal battle between the two entities.

However, the cryptocurrency market remains relatively bearish, with the price and trading volume of XRP down in the last 24 hours.

Ripple holders take no risk

At press time, XRP is trading at $0.60. The altcoin’s price has dropped 6% over the past 24 hours. During that time, trading volume was $27 million, down 27%.

The SEC met before with the digital payment company on July 25. While the outcome of that meeting remains unknown, the Sunshine Act Notice for Thursday’s meeting includes one additional topic of discussion from the July 25 closed meeting: the instituting and resolving injunctive relief. That has market participants speculating whether a settlement is imminent.

In an exclusive interview with BeinCrypto, Ryan Lee, Lead Analyst at Bitget Research, noted that:

“This meeting will discuss possible resolution options for the Ripple Lawsuit. The founder of Ripple Labs said that a legal settlement could be announced soon. If an official settlement plan is released, it could positively impact XRP’s price movement.”

However, an assessment of XRP’s price movements on a 4-hour chart shows a spike in bearish bias as the market awaits the outcome of this crucial meeting. Its Moving Average Convergence/Divergence (MACD) indicator readings show that its MACD line (blue) has crossed below its signal line (orange).

XRP 4 Hours Analysis. Source: Trading View

Traders use this indicator to gauge price trends, momentum, and potential buying and selling opportunities in the market. When an asset’s MACD is set this way, it is a bearish signal that suggests selling activity is outweighing buying momentum.

Additionally, the altcoin relative strength index (RSI), at 46.08, is currently below its neutral 50 line and in a downtrend. This indicator measures overbought and oversold market conditions for an asset.

To know more: How to Buy XRP and Everything You Need to Know

xrp rsi XRP 4 Hours Analysis. Source: Trading View

At 43.83 at the time of writing, XRP’s RSI suggests a growing preference among the market participants for tok in distribution.

XRP Price Prediction: Derivatives Traders Exit Market

The XRP derivatives market has also seen a decline in trading activity over the past 24 hours. According to Coinglass, derivatives trading volume has plummeted 18% and open interest has dropped 10% during that period.

Open interest refers to the total number of outstanding derivative contracts, such as options or futurethat have not yet been resolved. When it drops, traders close their positions without opening new ones. This is a bearish signal that reflects a lack of confidence in any potential positive price movement.

According to Lee, the outcome of the meeting with the SEC “would have a significant impact on the price movement of the token.” If the outcome is favorable, the price of the token could rise towards $0.75 in August.

To know more: Ripple (XRP) Price Prediction 2024/2025/2030

XRP Price Prediction XRP 4 Hours Analysis. Source: Trading View

On the other hand, if no favorable resolutions are reached, the price could plummet to $0.50.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto strives to provide accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyAND Disclaimers They have been updated.

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Markets

Bitcoin’s Dominance Hits Three-Year High, But Analysts Say Altcoins Are Ready to Rebound

Published

9 months ago

1 August, 2024

Financial Block Staff

Bitcoin's Dominance Hits Three-Year High, But Analysts Say Altcoins Are Ready to Rebound

Bitcoin is now the dominant force in the cryptocurrency market, surpassing 53% of the total cryptocurrency market, a stronger share than it has been in the past three years.

Bitcoin’s market cap now stands at $1.27 trillion, second according to CoinGecko data. In contrast, the total cryptocurrency market cap is $2.43 trillion, with Ethereum occupying 15.9% of the market, worth $389 billion.

Bitcoin’s rise to dominance this year is unusual, as altcoins typically do better than Bitcoin in a bull market. While meme coins made a strong comeback during Bitcoin’s rally to all-time highs earlier this year, the so-called “wealth effect” It has not been appreciated as much by mid-range coins, such as Ethereum and Cardano.

“ETF flows fundamentally alter market dynamics,” he wrote Meltem Demirors, former chief strategy officer at CoinShares, tweeted Wednesday: “BTC gains no longer translate to alts and the longer tail of crypto.”

Bitcoin’s takeover has continued even as the market cap of Tether (USDT) continues to grow, the world’s largest stablecoin and the third-largest cryptocurrency after BTC and ETH. Stablecoins are backed by fiat currencies and are excluded from some measures of Bitcoin dominance due to fundamentally different value models.

The surge continued to pace even after the launch of Ethereum spot ETFs last week, which ironically culminated in a news sell-off event, and net outflows from new investment products since they were launched. This went against the predictions of K33 Search so far, which predicted that ETFs would catalyze ETH’s growth over the next five months.

Despite the poorer performance of the alts, there is reason to believe that they are ready to bounce back very soon.

CryptoQuant CEO Ki Young Ju said Tuesday that whales are “preparing for the next altcoin rally,” as limit buy orders for assets other than BTC and ETH are on the rise.

The executive shared a chart showing how the “cumulative difference between purchase volume and sales volume” has increased in recent months.

“The indicator measures the difference between buy and sell orders over a year,” CryptoQuant told Decrypt. A buy/sell order is a pre-set request to buy or sell a cryptocurrency if it hits a certain price level, which creates resistance and support levels.

“If the trend is up, it means that more people are placing buy orders, showing strong interest in buying,” CryptoQuant said.

By Ryan-Ozawa.

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Markets

XRP and SOL Retrace as BTC Price Drops to 2-Week Lows (Market Watch)

Published

9 months ago

1 August, 2024

Financial Block Staff

Bitcoin Returns Toward $60K, XRP Defy Negative Sentiment (Market Watch)

After Monday’s crash, in which BTC fell by several thousand dollars, the scenario has repeated itself once again in the last 12 hours, with the asset falling to a 2-week low of $63,300.

Alt coins followed suit, with most of the market in the red today. SOL and XRP lead the way from the higher cap alts.

BTC Drops To $63.3K

After a violent Thursday last week, when BTC crashed to $63,400, the asset went on the offensive over the weekend and surged above $69,000 on Saturday, as the community prepared for Donald Trump’s appearance at the 2024 Bitcoin Conference in Nashville.

His speech was followed by more volatility before the cryptocurrency settled around $67,500 on Sunday. Monday started off rather optimistically for the bulls as bitcoin hit a 7-week high of $70,000.

However, he failed to maintain his run and conquer that level decisively. On the contrary, he was rejected bad and dropped to $66,400 by the end of Monday. Tuesday and Wednesday were less eventful as BTC remained still around $66,500.

The last 12 hours or so have brought another crash. Bears have pushed the leading digital asset down hard, which has fallen to a 2-week low of $63,300 (on Bitstamp), leaving over $200 million in liquidations.

Despite the current rebound to $64,500, BTC’s market cap has fallen to $1.270 trillion, but its dominance over alts is recovering and has reached 52.6%.

Bitcoin/Price/Chart 01.08.2024. Source: TradingView

The Alts are back in red

Ripple’s native token has been at the forefront of the market challenge in recent days as pumped up to a multi-month high of over $0.66. However, its run was also interrupted and XPR fell by more than 6% in the last day to $0.6.

The other big loser among the larger-cap alternatives is SOL, which has lost 8% of its value and is now struggling to get below $170.

The rest of this altcoin cohort is also in the red, with ETH, DOGE, BNB, AVAX, ADA, SHIB, and LINK all seeing drops between 2 and 5%.

The total cryptocurrency market cap lost another $70 billion overnight, falling below $2.4 trillion today on CG.

Cryptocurrency Market Overview. Source: QuantifyCrypto SPECIAL OFFER (sponsored)
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