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German regulator BaFin highlights overly detailed EU regulations such as MiCA

EU Europe regulation

BaFin’s Dr. Thorsten Pötzsch, Executive Director of Securities Supervision / Asset Management, discussed EU digital regulations in a speech today at the BVI Fund Operations Conference. Dr. Pötzsch said that legislation is necessary to create a safe jurisdiction for capital market players, and the crypto-asset regulation MiCA falls into that category. However, he called for “speed, clear rules and a minimum of bureaucracy.”

Apart from the main MiCA regulations, he highlighted the requirement of an additional 57 guidelines or legal rules on specific topics. “Despite all the understanding for quickly adapting regulations in fast-moving markets, I ask myself: Is this amount of rules really effective?” said Dr. Pötzsch.

“Couldn’t it really be simpler, more pragmatic?”

He continued, “If Europe wants to exploit the potential of the capital markets, it must not stand in its own way. Regulation should not be designed to regulate every little detail. It has to address the big problems.”

Germany has been a mover and shaker in the crypto-asset sector, especially for tokenized securities. In mid-2021, Germany passed its eWpG legislation allowing digitally native electronic securities. It supports the norm of a centrally controlled depository and the idea of a decentralized one, which it refers to as Crypto Securities. That makes Germany one of only a few countries that support securities issuance without a conventional central securities depository (CSD), although a company still acts as a registrar.