The European Banking Authority (EBA), the body responsible for overseeing banking regulations across the European Union (EU), is worried about its capacity to supervise digital assets under the new EU regulations that will come into force in 2025.
In an interview with the Financial Times, EBA chairman José Manuel Campa said one of the body’s major concerns is finding adequate staff to deploy in supervising the market. He envisions challenges in hiring and retaining the specialized staff that will be needed as there is high demand for such talent across the market.
According to Campa, the option of attracting digital assets talents through financial incentives like generous salaries is “not within the range of possible discussions” between the EBA and the European Commission.
He added that the EBA is equally worried about planning the logistics of enforcing the new regulation. For one, the Paris-based agency will not know which digital currencies fall under its purview until close to 2025. Meanwhile, the digital assets market is constantly evolving and may differ from what it is today in 2025.
“My concern is more about making sure the risk we have identified … is properly managed. If we don’t do as well as we should have, we’ll have to live with the consequences,” he said.
The EU regulation in question is the Markets in Crypto Assets (MiCA) legislation that EU lawmakers recently finalized. The bill places a strong focus on stablecoins and will be applied across all 27 member nations of the EU.
EU working on more digital assets regulation
While all the bill’s details have not been worked out, the European Central Bank (ECB) has already been imploring EU countries to avoid introducing their own regulations, which may contradict or fragment the MiCA laws.
The EU seeks to collaborate with other international regulators to uniformize digital assets regulatory frameworks. The EU’s MiCA law was the major topic during the recent Joint Financial Regulatory Forum, a regular event where the EU and U.S. regulators discuss matters of common interest.
EU lawmakers are also moving their focus to other digital assets-related regulations. Christine Lagarde, the head of the ECB, has proposed a MiCA II package of digital assets legislation that will focus on staking protocols, as well as DeFi borrowing and lending protocols.
Similarly, the European Commission is working on AML/CFT regulations for digital assets and regulations that will checkmate the environmental impact of energy-consuming proof-of-work consensus mechanism blockchains.
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