LEAKED EU Crypto Bill! Here’s What’s Coming To Europe!!

Recently a draft of Europe’s finalized Crypto regulations was leaked to the Press and the amendments were Interesting to say the least Although the final draft is not public We were lucky enough to get our hands on The document thanks to a European crypto Policy expert today I’m going to explain What Europe’s finalized crypto Regulations say in simple terms when They’re expected to come into force and Why they could be extremely bullish for The crypto Market Foreign I want to start by giving you a quick Recap of Europe’s upcoming crypto Regulations as some of you will know the European Union passed the quote markets In crypto assets regulation or Mica bill Over the summer specifically at the end Of June if you watched our video about The mica built from May you’ll note that The regulations within the bill will Apply to every country in the European Union these regulations will also Overrule every national law about Cryptocurrency in the EU because well That’s just how the EU works now some of You may also recall that the mica Bill Originally contained crazy proposals Like requiring kyc for all nft Marketplaces Banning defy and crashing Btc’s price to get rid of proof of work Note that Mica does not contain any

Crazy proposals about tracking crypto Transactions those are in a different Bill Now what’s awesome about Mica is that it Contains some concrete definitions for Different types of cryptocurrencies and How they should be regulated as far as The EU is concerned there are three Types of cryptocurrencies utility tokens Asset reference tokens or arts and E-money tokens or EMTs for the sake of Simplicity you can think of utility Tokens as including basically every Cryptocurrency that’s not an art or EMT Utility tokens include erc20 tokens like Decentraland’s mana and even Cryptocurrency coins like bitcoin’s BTC Under the version of mica from May any Crypto project that wants to conduct an Ico or have its coin or token listed on Exchanges in the EU must provide a Detailed white paper too and register With the relevant Regulators I’ll Explain the differences in the final Mica draft in the moment now next we Have Arts as the name suggests asset Reference tokens are any Cryptocurrencies that derive their value From some basket of assets This includes decentralized stable coins Like maker Dow’s die which is Collateralized by ethereum’s eth circles Usdc and other cryptocurrencies and Stable coins

Under the version of mica from May Art Issuers do not have to register with any European authorities so long as their Market caps do not exceed 5 million Euros which is not much at all if they Exceed this low limit they must maintain High quality reserves and cannot allow Holders of their art to earn yield And last but not least we have EMTs Which are of course centralized stable Coins this includes tether’s usdt Circles usdc and paxos’s busd I believe It also includes gold back stable coins Like paxos paxg but I suppose It Ultimately depends on whether the Relevant Regulators consider gold to be Money Now under the version of mica from May EMT issuers were subject to more or less The same rules as art issuers but with a Lot more scrutiny stable coins deemed Significant would have their transaction Volumes capped at 200 million euros per Day this is very low since all cryptos Trade against stable coins As you might have guessed these Restrictions around stable coins be they Arts or EMTs are due to the EU spheres That a stablecoin could displace the Euro these fears date back to Facebook’s Libra project and they’re becoming more Acute as the Euro declines against the US dollar This is why it’s so interesting that the

Final draft of mica which leaked in late September revealed that some of the Restrictions on centralized stable coins Had been removed as you’ll soon see this Is just one of the many interesting Things in the final draft of mica This final draft of mica is a whopping 1050 pages long as you can see it Contains four columns the fourth column Is titled draft agreement and it is the Final text that will officially become Law in just a few months just an FYI for Anyone who manages to find the full Document and wants to understand it Now as I mentioned in the introduction We managed to get our hands on the Document thanks to a European crypto Policy expert and advisor named Patrick Hansen Patrick has actually been the Source for much of the news you’ve been Hearing about crypto regulations in Europe especially Mica if you’re Interested in European crypto regulation I strongly suggest following Patrick on Twitter I’ll leave links to a few of his Threads about Mica in the description if You’re interested maybe you can convince Him to share the document with you too In all seriousness Patrick was kind Enough to answer all the questions we Had about his version of mica our first Question was obviously who leaked the Bill not surprisingly it was one of the Politicians who was intimately involved

With the bill itself not naming names of Course Patrick went on to explain that It’s quite common for high-profile EU Bills to be leaked this is because the Final discussions always take place Behind closed doors leaking the bill Essentially allows the lobbyists to Check if the changes they wanted were Implemented or if more persuasion is Needed so this immediately begs the Question of who wanted to see the final Draft of Micah leaked given that the Biggest changes related to the Restrictive regulations around Centralized stable coins it’s safe to Assume that stablecoin issuers were Involved again not naming names but I Think you can guess who as to whether These special interests were satisfied With the final Mica draft Patrick said That as far as he can tell the answer is Yes This is because all the regulations Proposed by so-called crypto Skeptics Were avoided This includes the crazy proposals I Mentioned earlier in Patrick’s eyes the Biggest upside is that Mica will Harmonize crypto regulations across Europe This means that a crypto project or Company just needs to get regulatory Approval in one EU country and it will Allow them to do business in the other

26. Patrick believes that this will make It easier for crypto projects and Companies to scale within Europe and Will simultaneously provide much needed Regulatory Clarity for institutional Investors across Europe Mica could Therefore serve as a catalyst for the Next crypto bull run more about that Later Now Patrick summed up the final draft of Micah as being quote mostly reasonable Unlike the transfer of funds or TFR Regulation which I alluded to earlier That’s the one that wants kyc to be Applied to every single crypto Transaction courtesy of the financial Action task force or fat F you can learn More about the fat F and how it’s trying To kill crypto by using the link in the Description Now figuring out exactly what changed Between the mica version in May and the Final draft of mica which leaked late Last month is no easy task I mean the Final draft is literally over a thousand Pages long and most of the text is Repeated four times due to the columns Making it very difficult to search by Keyword What’s scary is that Patrick admitted That only a handful of people are Intimately familiar with what’s in Mica And the changes that were made between The two versions for what it’s worth

Patrick’s research as well as our own Seems to have identified the biggest Changes so let’s start with the fun Stuff nfts and D5 now one of the biggest Criticisms of the previous version of Mica was that it didn’t contain many Details about these two niches to be Exact it didn’t have any details about Nfts at all and seemed to imply that D5 Protocols would have to register with Regulators in the final draft of mica The author specified that fractionalized Nfts will be treated like utility tokens This means that issuers of Fractionalized nfts will have to Register with Regulators present a white Paper and all that other stuff more About fractionalized nfts in the Description I digress What’s odd is that the authors also say Quote the issuance of crypto assets as Non-fungible tokens in a large series or Collection should be considered as an Indicator of their fungibility in other Words if there is an nft with a large Collection of similar looking jpegs they May also be subject to regulation According to Patrick it’s likely that Regulators will decide the fungibility Of nft collections on a case-by-case Basis He’s also concerned that extra scrutiny Could be applied to larger nft Collections including popular ones like

The board ape Yacht Club note that Patrick didn’t name any names here Now Defy is where things get really Interesting that’s because the author Specified that Micah does not apply to Defy quote where crypto Asset Services As defined in this regulation are Provided in a fully decentralized manner Without any intermediary they do not Fall within the scope of this regulation This begs the question of what Decentralized means according to Patrick The definition of decentralization will Be decided on a case-by-case basis this Is a bit concerning as it leaves the Door open to biased regulation but it’s Still easily the best defied regulation In any developed country so far it’s Also more significant than you think Because Regulators in the United States Don’t even consider defy to be a thing As far as they’re concerned the define Niche doesn’t exist the fact that European regulations are seen as the Gold standard could therefore help U.S Crypto Regulators find reason don’t get Too excited yet though the final draft Of mica also notes that a report will be Issued next year that will address the Feasibility of regulating defy in the European Union with some luck the crypto Lobbyists will manage to protect defy From a total Crackdown by the bank Lobbyists

Anyways when it comes to utility tokens The final draft of mica didn’t have that Much to say about them then again Neither did the May version of mica You’ll recall this is because the focus Of mica is fundamentally to protect the Eurozone from succumbing to a foreign Currency of some kind That said I did find an interesting Provision on page 40. quote no Requirements of this regulation should Apply to crypto assets that are Automatically created as a reward for The maintenance of the DLT or the Validation of transactions in the Context of a consensus mechanism now Call me crazy but this sounds like Cryptocurrency coins will not be subject To mica This makes sense when we’re talking About coins like BTC eth and even Ada However it makes less sense when we Start talking about new crypto coins That were funded via VC focused icos at Least in my opinion Now the very next phrase of this Paragraph also suggests that tokens or Nfts that are offered as part of loyalty Or rewards programs will not be subject To Mica either if my interpretation is Correct I suspect we’re going to see no Shortage of coins exploit this Regulatory loophole during the next bull Market

On page 179 I found another interesting Provision about utility tokens this Provision suggests that a crypto project That conducts an Ico must complete its Dap or blockchain within one year of the White paper being published it’s not Entirely clear but it makes sense so I Suspect this is the case after all you Wouldn’t want someone to issue a white Paper conduct an Ico and then change What the project is about later down the Line come to think of it there are lots Of crypto projects that have pivoted Like this and from what I can remember It’s never ended well for them or the Ico participants Now when it comes to Arts the term asset Referenced token is used no less than 3 000 times in the final Mica draft for Reference this is half as many times as The term e-money token is mentioned Meanwhile the term utility token is only Mentioned 72 times really gets the Noggin jogging now unfortunately we Didn’t have time to check every single One of the 3000 mentions of Arts even so We still found a few very interesting Things I’ll start by saying that there Was a lot of overlap between Provisions For arts and EMTs which again makes Sense given mica’s stablecoin Focus Interestingly this is not the case with All the provisions found on pages 62 to 72 where the authors give an extremely

Long list of all the regulations that Art issuers must abide by It appears that EMT issuers are not Subject to nearly the same degree of Scrutiny and this is something Patrick Also pointed out it’s almost as if Centralized stablecoin issuers don’t Want competition from decentralized Stablecoin issuers but surely that would Never find its way into regulation right Conspiracies aside on page 256 the Authors specify that white papers for Arts must always include three Disclaimers the art can go to zero the Art may not always be transferable and The art may not always be liquid tell me You’re talking about Terror without Telling me you’re talking about Terror Then on page 360 There’s A peculiar Provision which seems to suggest that The release of an audit of an Art’s Reserves can be delayed if it is quote Deemed necessary to protect the economic Interests of holders of the asset Reference token make of that what you Will When it comes to EMTs the most Significant change in the final draft of Mica is the clarification of what is Meant by transactions in the context of Stablecoin transaction limits Patrick Found this clarification on page 77 Where the authors specify that Transaction limits on stable coins will

Only apply to payments this is important Because it means that stable coins like Usdt and usdc have no usage cap in other Contexts they can be used for trading in Defy and other non-payment purposes with No limits now this is great but I can’t Help but feel that this provision could Become a loophole for peer-to-peer Payments what’s interesting is that this Loophole probably isn’t a problem Because Patrick found that many of the Original EMT restrictions will still Apply to US dollar stable coins this Means that only Euro stable coins will Not be subject to restrictions which Makes sense given that they don’t Compete with the euro It also makes sense because of the Assets that back stable coins if you Watched our video about that you’ll know That most of them are backed by debt Mostly U.S government debt this means That when you buy a USD stablecoin you Are subsidizing the US government Naturally issuers of Euro stable coins In Europe will be required to hold their Reserves in quote highly liquid assets This is almost certainly code for European government debt as it is a Highly liquid asset and I suspect which Government debt will depend on which European country requires the subsidy For context the European Central Bank Has had a hard time raising interest

Rates because it would cause issues for Countries like Italy and Spain With a Euro Sable coin however it would Be possible to invest the capital of Unsuspecting crypto holders into Italian And Spanish debt to keep the Eurozone Intact On that note a few months ago Patrick Explained that the reason why we didn’t See a Euro stable coin until recently Was because base interest rates in the Eurozone were negative This meant that a Euro Sable coin issuer Wouldn’t stand to make any money holding European government debt to back a Euro Stablecoin this is why Circle revealed a Eurobact stablecoin shortly before the ECB started raising interest rates it’s Safe to say that circle is now perfectly Positioned to take advantage of the Favorable stablecoin Provisions in the Final Mica draft funny that Speaking of which there were a couple of Interesting stablecoin Provisions I Found which stuck out to me the first is On page 982 and it says that stablecoin Issuers need to disclose whether they Have any affiliation with the smart Contract cryptocurrencies their stable Coins are circulating on now this is Fascinating as it could reveal some Previously unknown affiliations between Major stablecoin issuers and smart Contract cryptocurrencies

I can think of a few which might come up But I’ll leave that to your own Imagination and research The other interesting stablecoin Provision is on page 987 and it seems to suggest that Stablecoin issuers will not be allowed To charge any fees for minting and Redeeming their stablecoin tokens This just underscores how much Stablecoin issuers will rely on European Government debt for Revenue So this brings me to the two big Questions you came here for and that’s When Mico will come into force and why It could be extremely bullish for the Crypto Market Patrick explained that the next step is For the final draft to be voted on again By European politicians this will happen In the next couple of weeks it’s Important to note that no more changes Will be made and this vote is just a Formality Once that’s done the text in the final Draft will have to be Rewritten for Clarity reviewed by lawyers to make sure The same regulations are being Communicated and then translated into All the lovely languages of Europe Patrick estimates that this whole Process will take another few months but We should see the official Mica Regulations published no later than

February next year Mica will immediately become law the Moment it’s published but there will be Transitional periods for the regulations Within it Patrick said that the Stablecoin related regulations will come Into Force roughly one year from Publication so early 2024. The rest of the crypto regulations will Come into Force around 18 months after Publication so mid to late 2024. this Coincidentally corresponds to roughly When the next crypto Bull Run will begin Hence why I believe Mica could be Extremely bullish for the crypto Market It will bring regulatory Clarity to Institutional investors in Europe at Around the same time when interest in Cryptocurrency will be on the rise the Perfect catalyst This in turn could give rise to lots of Promising European crypto projects and Companies but there is one caveat All the Regulatory Compliance could make It hard for new crypto projects and Companies to get off the ground from Within Europe something Patrick is also Concerned about This is especially true of any crypto Projects trying to create decentralized Stable coins which will be subject to a Laundry list of limitations as Arts It might also be tricky for D5 protocols To get off the ground as their success

Will depend on whether Regulators Classify them as decentralized or not Now all in all I agree with Patrick that Mica is mostly reasonable I also agree with his perspective that Crypto regulation in the United States Will not be nearly as reasonable as it Is in Europe this could make the current Crypto bear Market worse and create Headwinds for the crypto bull market When it returns You can learn more about the upcoming Crypto Crackdown in the United States Using of course the link in the Description And that’s all for today’s video about Europe’s upcoming crypto regulations if You found it informative be sure to Smash that like button to let me know Remember to subscribe to the channel and Ping that notification Bell so you don’t Miss the next video in the meantime you Can check out coin Bureau clips for live Streams and emergency crypto updates and Tune in to the coin Bureau podcast for Quality crypto discussions that no Coiners hate you can also follow me on Twitter tiktok and Instagram for memes And behind the scenes and join my Telegram channel to get all the crypto Updates you need the only thing better Is My Weekly Newsletter where I reveal My crypto portfolio and tell you about The upcoming crypto weather if you want

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