Europe vs US
Europe, long lagging behind the United States in terms of fundraising for startups and innovative projects, is reaching a major milestone with the application of the regulation on crypto-asset markets (MiCA). This ambitious regulation represents the governments' first attempt to oversee the emerging industry on such a large scale, following the collapse of several major players, including the crypto-asset exchange platform FTX.
The MiCA regulation, which has been developed over three years, is seen as an alternative to the American approach of regulating the sector through punitive actions. Industry leaders in the crypto-asset sector applaud this initiative, but some critics argue that the regulation is already obsolete even before its implementation, as it only partially addresses the recent industry setbacks.Consequently, updates are already being demanded.
A harmonized regulatory framework at the EU level enhances the region's attractiveness to cryptocurrency companies and puts pressure on other jurisdictions to follow suit, according to Alisa DiCaprio, Chief Economist at enterprise blockchain company R3. PitchBook data shows thatEurope is gaining market share in crypto-asset-related venture capital investments compared to the United States. As a reminder, MiCA requires, among other things, the establishment of adequate risk management and governance processes to prevent a collapse similar to FTX's.
Decentralized finance and web3 environmental impact about to be covered in MiCA II?
However, MiCA I does not cover certain key areas of the crypto-asset industry, such as crypto-asset lending, decentralized finance (DeFi), and non-fungible tokens(NFTs). This has led some individuals, including Christine Lagarde, President of the European Central Bank, to already call for a MiCA II.
In addition to the already identified challenges, it is expected that the MiCA regulation will evolve and incorporate the need to account for carbon emissions. This is precisely where BitSCOR comes into play, enabling users and clients’ businesses to track their carbon emissions, offset them, and even conduct ESG audits on their projects. Furthermore, with the growth of the crypto-asset industry, it is becoming increasingly evident that measures need to be taken to mitigate its environmental impact. Reports on carbon emissions could be an important step towards more comprehensive and sustainable regulation. It is necessary to stay ahead of legislation to find solutions even before web3 companies find themselves in a bind. Therefore, BitSCOR positions itself as a pioneer that will allow them to better adapt to MiCA II.
To sum up:
The MiCA regulation represents a significant advancement for Europe in the race for fundraising, allowing us to strengthen our position against the United States.Although there are still challenges to overcome and areas to improve, MiCA lays the foundation for a harmonized regulatory framework for the crypto-asset industry in the European Union. Its future evolution (MiCA II) aims to compel companies to report on their carbon emissions. This demonstrates Europe's willingness to adapt and advance regulation for an ever-evolving sector.BitSCOR positions itself as a leading pioneer by offering various services ranging from carbon emissions calculation to carbon offsetting, as well as ESG scoring.