Browsing by Subject "kryptovaramarkkina-asetus"

In recent years, stablecoins become a hot topic in the debates among policymakers and experts in financial regulation. A stablecoin can be defined as a virtual currency that aims to maintain a stable value relative to a specified asset, most often the United States dollar. In essence, stablecoins are an attempt by private companies to bring fiat currencies into the crypto space. Their primary purpose is to provide an option without volatility within the cryptocurrency market, where price swings are common, and the stability aspect distinctly sets stablecoins apart from other virtual currencies. This stability is crucial for enabling practical, everyday uses of digital currencies, such as payments, remittances, collateral, and as a safe haven for traders and investors during periods of high volatility in the broader crypto markets. Despite their goal to stay pegged to the value of the asset they link themselves to, stablecoins have not always managed maintain a stable value. Some have outright collapsed. Thus, their reliability has raised concerns. The European Union’s Regulation on Markets in Crypto-assets (MiCAR) aims to generate stability in the sector by introducing a wide variety of requirements to issuers of stablecoins. These include strict capital and liquidity requirements, comparable to traditional financial regulations. By doing so, it aims to integrate crypto-assets into the European Union's financial system by ensuring that they are subjected to appropriate oversight and regulatory standards. While protecting customers and investors and safeguarding financial stability, MiCAR sets a high bar for stablecoin issuers. It is possible that these strict requirements could potentially restrict the entry of new, innovative players in the crypto market. This might lead to a market dominated by large, established financial entities, potentially stifling innovation in the field of stablecoins. However, MiCAR can also increase the credibility of the crypto market among investors, consumers, and businesses by establishing basic guarantees on the transparency, reliability and accountability of service providers.