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not the best week for crypto lending platforms, June 20-27

Due to the suspension of withdrawals by the Celsius Network in mid-June, the topic of cryptocurrency lending itself entered the list of priority issues for regulators. Last week, lawmakers and officials continued to raise the question of the necessary measures, with significant statements from one of Europe’s leading cryptocurrency skeptics, Christine Lagard.

The president of the European Central Bank was so impressed with the Celsius crisis that she coined the term “MiCa II”, referring to the main regulatory package for cryptocurrencies in the European Union. Lagarde believes that the new MiCa should include separate guidelines for crypto asset staking and lending.

However, you don’t have to be an official to discern the flaws in the current cryptocurrency lending model. Inveterate Bitcoin (BTC) maximalist and CEO of Swan Bitcoin, Cory Klippsten, fears that the liquidity crisis hitting Celsius is just the beginning of a broader collapse in the cryptocurrency lending space. “Their lending books are opaque. Their activities are opaque. They are being vastly under-compensated for risk,” he explained in an interview with Cointelegraph.

90% of central banks are investigating the usefulness of CBDCs

If any central bank in the world is chosen, there is a 90% chance that they have spent time researching or testing their own digital currency project. At least, that’s what the new annual economic report published by the Bank for International Settlements (BIS) says. However, the numbers are much more modest when it comes to fully operational CBDCs: there are currently only three active retail digital currencies and 28 pilots.

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Information Disclosures Should Be Read, Not Just Filed

The above headline, summed up in the words of Georgetown University Law Professor Christopher Brummer, could be read as the theme of last week’s hearing on the regulation of digital assets in the US House of Representatives. Although it should have focused on the gaps in the supervision and regulation of the underlying spot and derivatives markets, the debate was very broad. Brummer pointed out that the information disclosure law assumes that issuers have access to information that consumers do not, while Blockchain technology is transparent but difficult to understand.

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The SEC and the CFTC are still trying to agree

The chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, revealed his negotiations with his colleagues from the Commodity Futures Trading Commission (CFTC). The two main regulatory bodies in the United States are working on a “memorandum of understanding” for the regulation of digital assets. “I’m talking about an exchange rulebook that protects all trades regardless of pair – [sea] a security token against a security token, a security token against a commodity token, a commodity token against a commodity token,” Gensler explained.

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Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.

Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.

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