An official of the European Union has during the day the Korea Blockchain Week conference in Seoul indicated that the fall of Terra (LUNA) could have been prevented. With the new requirements that come with the Crypto Assets (MiCA) law, Terra could never have failed.
New law for the European cryptocurrency industry
This new legal framework, which has not yet been adopted, should provide clarity for the laws within the cryptocurrency sector in Europe. This law would state that crypto issuers must meet a number of requirements if they want to do business in Europe.
After nearly two years of consultation, policy makers have finally agreed on these requirements. These requirements are, for example, that they white paper have to issue, be registered with the authorities and have enough reserves if they want to issue stablecoins.
Peter Kerstens, technology and cybersecurity policy advisor at the EU executive, has indicated that more compliance rules will be introduced. This would make stablecoin projects more transparent. Users would also be able to withdraw their money whenever they want.
“We don’t want people to blow up the system or just go bankrupt like we saw recently with Terra-LUNA, which just melted away,” said Kerstens. “MiCA prevents such schemes from entering the market.”
Other countries are having a hard time with crypto laws
Regulators from all over the world are struggling to shape these rules in the crypto world. Terra’s fall has shown yet again how important it is to deploy clear requirements.
In South Korea, the crash of Terra meant that new laws were quickly designed for the crypto industry. The country’s regulators have indicated that the forthcoming Digital Asset Basic Act has been copied from similar laws in the United States and Europe, including the MiCA. In this way, the country wants to create global agreements regarding this law.