MiCA have problems with stablecoin transactions; Bank of England president targets Bitcoin; Cryptocurrency inflows are increasing: $470 million
The European Union’s Crypto Asset Markets (MiCA) legislation is thought to stifle stablecoin usage as it sets daily transaction limits. Those who believe that the regulatory framework needs to be revised continue to multiply.
The MiCA, which went into effect on May 31, had become the world’s first regulatory legal framework for cryptocurrencies.
Although the regulatory framework was welcomed by many in the crypto industry, it was brought up to be a controversial clause of the legislation. This item is the $219 million limit in daily transactions for private stablecoins like Tether (USDT) and Circle’s USD Coin (USDC).
Due to its stronger ties to the traditional financial system through the use of reserves, regulators are particularly concerned about the potential impact of the bankruptcy of a larger stablecoin.
He noted that MiCA regulators are unlikely to have overlooked the potential negative effects these regulations could have, especially given the prevalence of private stablecoins in other markets.
If relatively unrestricted use of stablecoins is allowed in other countries, this could negatively impact the crypto market in the EU.
Agnihotri also noted that such a wide-ranging legislation received criticism as expected, but most of the feedback on MiCA was mostly positive.
Bank of England president targets Bitcoin
The head of the UK central bank has targeted the leading cryptocurrency Bitcoin.
Bank of England president Andrew Bailey pointed out that Bitcoin and similar cryptocurrencies are extremely speculative assets.
Speaking at Mansion House in London, Bailey said that despite the rise of cryptocurrencies, he thinks fiat currencies will continue to be used.
Bailey also targeted stablecoins along with cryptocurrencies like BTC. According to him, stablecoins do not meet the standard of being a safe currency.
The popularity of stablecoins, which are cryptocurrencies pegged to fiat currencies such as the dollar and euro, has grown tremendously with the growth of the industry. But Bailey believes these assets are unreliable.
Bank of England president Bailey stands out for his cautious attitude towards cryptocurrencies. Bailey has criticized the speculative nature of cryptocurrencies in the past and said that investors can lose all their assets.
Bailey stated in January 2021 that digital currencies do not have any value. He argued that the fact that people use cryptocurrencies as a means of payment does not change this.
Speaking about the country’s economy, Bailey said that he expects food prices to decrease a little and that there will be some relief in the midst of economic uncertainty.
Cryptocurrency inflows are increasing: $470 million
James Butterfill, head of research at crypto investment firm CoinShares, evaluated the recent surge in crypto inflows in a blog post published today.
According to Butterfill, digital asset investment products saw $136 million in inflows last week, increasing inflows to $470 million for the past three weeks. This fully compensated for the 9-week debuts, providing a net positive flow of $231 million since the start of the year.
However, Butterfill stated that there was a slowdown in transaction volumes, with investment products reaching a weekly total of $1 billion, compared to an average of $2.5 billion in the previous 2 weeks. It is also thought that these low volumes in the market may be due to seasonal effects, where lower volumes are usually experienced in July and August.
While Bitcoin continued to be popular among investors with a total of 133 million dollars of inflow last week, there was a sales of $ 1.8 million for 11 consecutive weeks in short position transactions. This reveals that investors are currently more interested in Bitcoin than altcoins.
However, Ethereum (ETH) recorded a total inflow of $2.9 million last week. The last 3 weeks of entries represent only 0.2 percent of total assets under management (AuM), compared to 1.9 percent of Bitcoin. But Butterfill said it has remained in a negative net flow position of $63 million since the start of 2023. Despite this, small outflows of $ 0.3 million were seen in short position transactions opened in ETH.
Finally, James Butterfill stated that blockchain stocks are witnessing the biggest inflow of the last year, with a total of US$15 million.
