Policy vs Progress: Can Regulation Keep Up with Innovation? | EBC11

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so much. Uh, good afternoon. Good afternoon, everyone. H, it's great to be back here in Barcelona for the European Blockchain Convention. My at least the fourth or fifth time that I'm here. So, it's a pleasure again to be here with the team. They're doing a great job with it's great to see how much they developed. I'm Tomas Astat. I'm the policy director at Blockchain for Europe, which is a Brussels-based trade association representing the blockchain industry, the crypto space with European policy makers. So all the mika regulation that you hear about that you're going to hear about in this panel, well, we have been trying to make it a tiny bit better for the industry. I know there are a lot of challenges, there are a lot of problems and we're going to discuss that with this great

panel that we have. Uh but at the same time, I think we can also be happy about the fact that we have MA in Europe. So we're going to talk about that and in uh about the impact that the Mika regulation already has on the industry. We have some very interesting perspectives here on stage as you will hear directly from from them. They've either uh gone through the Nika licensing process themselves or they've been supporting companies and entities that want to get a Mika license. So they've been engaging with the different regulators in different jurisdictions. So that's also going to give us an interesting perspective and then we maybe can talk about what's coming up you know how do we really ensure that regulation goes at the same pace of innovation uh if that is possible at all

uh but at least what can we do in the future what is coming up what to pay attention to in the coming months coming from Brussels but also from all over Europe so without further ado I'll let my speakers introduce themselves and then we get started and we have a nice conversation >> good Afternoon everyone. I'm Marina Valonga, partner at Asencia Bogados, which is a Spanishbased law firm. We focus in gambling, gaming, and crypto assets regulations. >> Hello. Good afternoon. Nicolu. I'm the CEO and co-founder of Coin House. Uh we are a French broker uh crypto broker. We are the first one also regulated in

France uh with the former uh French regulation which was before Mica and we are applying also for for Mica and we deliver uh crypto asset services investment services to uh retail and SMB enterprise uh and some institutional customer uh based in France and also in Luxmbourg where we are regulated. >> Hi everyone, my name is Cla Balva. the general manager at ADAN which is uh the biggest association representing crypto companies in France and we uh also work with uh other associations in Brussels of course. Uh before that I spent 10 years in the crypto industry mostly in crypto consulting uh and I also worked for DBlock um which was the first

company to get the MA license in France. >> Um so I'm Mateo I'm a senior associate and the head of crypto at MK Fintch Partners Limited. Uh we are a law firm uh specializing in crypto and fintech based in Molda and we effectively assist clients throughout their application process. Assist them with with any of their legal needs to make sure that they're covered from a legal and regulatory perspective. >> My name is uh Nicholas. I am with a global by bit team. We're a Mika license. We're a global exchange although would like to be called ourselves as a finance company. Uh we're present in uh Spain. We have uh the best country manager Allan here who's

recording me. I can see now. But uh I'm really excited to be here and thank you Tomaso for uh having this exciting uh conversation. Thank you so much and indeed we want to have an exciting conversation. I think we all get too bored when panel debates are, you know, one question after the other and everybody's just responding and reading from their notes. Uh we really want to have a conversation. So we're going to have it, you know, keep it flowing and we also would love to get questions at the end. So get your questions ready. But mean in the meantime, we start in a bit more of a traditional way again going around uh with the first question being what is your perspective on the Mika framework? So how you know especially from your specific perspective the work that you've been

doing how is ma impacting your business or the work that you're doing with your clients and anything that you want to share in terms of your engagement with national company authorities. We start from that and then we're going to get uh the conversation started. >> Well I'm guess I'm okay. Um first of all I have to say that Mika regulations I don't I don't want to be obvious here. We all know about Mika. Um I know we are not going to say the the obvious thing but Mika regulation has been the first in the world uh taking care of crypto assets and as uh Juan Carlos Alina said being the first is not easy. So um you are taking the risk you are um you are

departing from nowhere. Um it's a test and of course it's not perfect and there will be mistakes that should be addressed. So we cannot um uh we cannot wait for the perfect regulation at the first shot. Uh of course now they are other there are other uh regulations all over the world. They are mirroring Mika. they are um trying to address this uh these mistakes or these uh yeah these things that could be improven. So of course we need to work on it. Um, and from the Spanish perspective, which I guess I'm the only Spanish based here,

um, it has been very well received, uh, by the government, by the supervisor, the regulator, um, the the CNB in here, uh, the Spanish regulator, uh, is really trying to keep the pace, is really trying to learn. um they are hiding people, they are training theirelves. It's not easy to understand the regulation. It's not easy for us, it's not easy for them. Uh we help each other with conversations, with debates, with dialogue, but of course we are all learning. Um, Spanish is not being the most uh fast track to get the

Mika license, but they are trying to do as best as they can. They try to learn. They they I mean they are putting uh all the um resources they have. So I think that we are not so bad here. >> All right. So we start from Spain literally, right? we're here and it's really great to hear the perspective of someone who's dealing on a daily basis with the Spanish regulators and indeed I think it's uh something that everybody is understanding also throughout this conference that the regulators in Spain have taken a good approach right they're ready to listen they're ready to engage u but again maybe they haven't really managed to give out so many mika licenses yet right so we go to the other

opposite now right we go to France we go to France where where France has taken actually a leads even before Mika, right? So, we can talk about the sun uh framework, but now I think the AMF and the um the CCPR, right? They are the two regulators based in in Paris, they are actually being a pretty good example of how uh you know, at least they should try and approach the licensing process, the engagement with companies. Nicholas, you want to tell us a bit more about your expertise, your experience in France?

>> Yes, you're you're right. Mazo France was um has been leading this um this regulation framework in in the past. Um you have also to recognize that the French regulation was very good at least to defining the activity. Uh but it was mostly focusing on AML CFT. Uh so uh not uh all what is included today in Mica which is uh anyway something that was uh we were all calling for regulation. I was calling for regulation. I think it's uh it's something which is important uh for the development of our activity for the maturity for the protection of the customer. Uh but this mic regulation is uh is a huge step uh in compared to what

we had in in the past. That's why it's not so easy. Uh we are working on it for instance at coin house uh and uh we have so filed our application. it's under under the process uh now uh but what my experience is um it's especially going to the details but um some aspects of the regulation uh such as the segregation of funds of our clients um has a huge impact from uh my perspective on the the liquidity venue and the way we source uh liquidity uh to um um uh to yeah sourcing provider So um in say in other words um we used to work with

exchanges uh because we are a broker and uh it sounds that it's not so compatible with maf for instance. So we had to totally change our way to execute order and to source our liquidity which has a huge impact on uh on the development the tech and the way it it works. Um so it's a significant work also uh to be uh to be compliant with MIA if you really want want to uh uh to uh uh to fulfill all the compliance aspect and if you want to be also um compatible with the French way of interpreting MIA I'm sure we are going to discuss about this uh but it has a huge impact and we are probably

also going to discuss uh um later but it's not only about Micah but it's also about the travel rule implementation, DHA and some other um uh new um uh regulation that have to be taken into account and which has a huge impact in term of cost development, product development. Um and sometime it's even not so easy because uh you you have to count on some providers to uh to be able to uh uh to answer those compliance issue. But your providers does not necessaril necessarily have the maturity uh to provide the right solution. If you look at the travel rule for instance, there is no solution today regarding the travel rule. If you take all the the

point that has to be uh fulfilled. You you have part of it but you don't have any uh any uh any global solution. Um it's okay probably uh we we know it but it means that it's going to be a lot of work uh and a lot of maturity. we there is a lack of maturity John >> so even in a jurisdiction where you know we know there is maturity we know there is understanding we know that the French authorities have taken a very proactive approach to the regulation of the industry in France and everything there's still a lot of challenges there's still a lot of questions especially as Nicholas was talking about the interplay of the different pieces of legislation right na mica whatever you want to call it is just one piece is the

important of course because it provides the comprehensive structure definitions and clarifications on who's a service provider, what is a crypto asset service and all of that. But then I think we already we already heard a couple of other pieces of legislation still coming from Brussels that are complicating the life of crypto companies. Maybe uh Claire you want to touch upon a few of those. I think you have a very interesting French perspective but also you know the work that Adan is doing at EU level together with blockchain for Europe and other associations. You probably can share a few more thoughts on this. Of course and I agree with Nicholas. Mika is giving more visibility to the industry and Mika is forcing the industry to become more mature which is

a good thing and uh for example at Adan we are seeing more and more uh large corporations um become a member of uh of our association and we are seeing a lot of banks coming into crypto. On the other hand um and it is true we have to say it as well. Mika is also killing companies, small companies who will not uh have the funds to uh get through the the the licensing process. So the industry is becoming more and more mature with bigger and bigger players. Uh and the second thing I wanted to say is that um Mika is supposed and is harmonizing um the way things are done in Europe but it is actually moving um the competition from the legislation to the regulator side. uh and regulators

today are not interpreting mika exactly in the same way. Uh so companies like coin house or like bit are choosing the countries they uh they go to um depending on the way regulators interpret mika and that's actually a big thing. I guess we're going to talk about it later. But um in France we have a very serious regulator who had anticipated a lot uh which is good but since it is also a very serious regulators think things can be a bit more um a bit more slow and a bit more difficult. You have to earn it. You have to earn your French license.

>> You really have to earn the French license, the trust of the French authorities. But then how does this translate to other jurisdictions, right? and how for example sometimes the French authorities can might perceive the licenses coming from other jurisdictions. I think this is a topic that we really wanted to to get across in this panel. Uh so maybe we can also start with Matteo who has a very specific expertise and experience in Malta. So he can tell us a bit more about the you know the experience the challenges there and maybe share your thoughts on on this conversation around some of the jurisdictions that are giving out licenses.

>> Yeah. So to me, maybe I'm biased because it puts food on the table, but policy and regulation is the way forward. If we want crypto to become widely adopted and to become a day-to-day use, we need regulations because that gives the public trust and and confidence in the system. Is Mika perfect? Far from it. But if you've seen the first drafts of Mika, they were far worse. policy is not a one anddone thing. It is something that grows as time goes along but it is something that we need to take steps towards. I mean uh as as CLA was saying I I also have experience with a very strict regulator. I deal with the MFSA

nearly every day. Um the benefit that Malta has is that before Mika we had a virtual assets framework which was nearly a copy of Mika if anything a bit more strict than Mika is nowadays. and the regulator had 5 years of experience dealing with that before they had to transition to Mika which made them more able to preempt most issues. We still have questions. We still have issues coming up such as the PSD2 overlap which I'm sure we'll discuss uh throughout this panel which it it does sort of frustrate me that in the 5 years that we were discussing ma these things don't come up then and they come out as soon as we're uh we're starting to implement.

At this point, the industry, at least in Europe, is at a point where we're starting to implement a regulation which can put us at the forefront of the crypto industry worldwide. But unfortunately, there's been goalposts moving all over the pitch. They've gone forward, they've gone backwards, sideways, up, down. And that to me is what truly kills the smaller players because if there is a player who has the money to go through an application, as soon as they've gone through that application, you suddenly move the goalposts and you tell them that they need to jump through another hurdle or even worse, you tell them to jump, but you don't tell them to work.

These are this sort of uncertainty is what um sews doubt in the crypto industry and it sows doubt into people who are willing to invest their money into it. Certainty comes through implementation and it comes through repetition and that will take time. So I think we need to trust in what we have while still aiming to grow it. Uh and still aiming to improve it but let's not let's not reinvent the wheel just yet. >> All right. Thank you Mattel. And last but not least in our great panel today we have Nicholas from Bybit. And I think you know we have been working together now for some time also on some of these issues. I think Nicholas can also share a bit of his perspective on how their

licensing process has been going uh but also then on some of these pending questions that we're looking at uh when it comes to ma its future implementation and potentially its future iteration. So share any any thoughts you want to share on this? >> Sure. Um I guess lots of uh interesting thoughts have been uh said. uh just to contribute I would like to take a step back and say that we are in the arms race with the regulator. So crypto is an arms race with the regulators and um and you know who's going to win it's crypto for a very very simple reason that crypto has infinite resources and it's

unified while regulators uh we've seen uh very different positions across the globe and especially in Europe as well. Now, crypto is going to win also because it attracts the best talent. And uh if you know, I dare say that uh a a gentleman or lady finished university in France would have to choose either go and work for the great company with great growth opportunities like Coin House or go work for the ministry. And I I'm pretty sure 95% would go for the coinhouse because most likely double the salaries and double the opportunities.

And this is where the future is. Where the talent goes is where the future is. So I'm pretty sure crypto is going to win. Now the more important question is who's going to lose? And uh if we look 20 years back uh when the most talent went to uh investment banking, the best paid jobs, most opportunities, the most uh talented and hardworking people were there. Creating products that uh few rating agencies could understand, let alone uh regulators follow and and supervise. And at that time customers suffered. And I

believe that uh Mika is giving a very very different perspective where actually crypto private sector is working with the governments so as to avoid the mistakes that were made 20 years ago. And I believe that this is a really important and uh changing the whole platform of how we develop the ecosystem. And the most important part in this uh in this journey is that uh the trade associations and communities that bring to it. It's what Tomaso and and Claire are doing in in their respective uh uh playfield is bringing together this perspective of the private sector and working in collaboration with the

government institutions in trying to build the framework together so as to avoid the mistakes that we had 20 years ago. So Mika is a great thing. Building communities is very important and guys what you do is is of tremendous help and we as BID really proud to be part of Tomasayor and Clare your uh organizations. So thank you so much. >> Well thank you for the shout outs. Really appreciate of course and indeed um I think Nicholas obviously is pointing out to to what is happening you know around Nika right. So yes, we got the legislation uh the proposal by the European Commission but then there has been such a long process actually since 2019 2020 to get us where we are today uh where indeed there was this dialogue

there was this conversation going between the private sector and the public authorities and it keeps going to today right until today because there are still a lot of questions a lot of issues a lot of challenges so let's try and delve a bit into that because I think here we all are really working uh in the depth of these challenges. But I think it could be interesting for the audience that maybe are not following so closely what's happening in Brussels and all around the European Union on what really are the challenges right now in the implementation of Mika and what are the challenges what are the problems that might bring us to already discuss a ma 2.0 way earlier than potentially expected. So now it's free flowing guys.

I don't want to go one after the other anymore. So, let's uh let's have a nice conversation. Please jump in, respond to each other, disagree. Let's get started. Nicholas. >> Yes. I think that I've been hearing a lot of uh sort of criticism and concerns that well, they're going to reopen Mika. There's going to be a new legislation and myself in in my previous um life uh I've been issuing laws as a member of parliament. And it's a very natural thing that that laws evolve. Laws are not set in stone and it's natural that they change. Now the Mika the first time it was introduced was what more than five years ago. Just look at how the crypto the blockchain industry evolved over that time. The trial lateral

agreement was what 3 years ago uh implementation and and became the law two years ago. So many things have changed. So and if they reopen it in a year's time or two years time or they start discussing now it's a very natural process and something that we should not be against that we should not be afraid. We should rather work together to make sure that the outcome that is it saves safeguard is it safeguards the financial stability and it does not damage the ecosystem in a way in the process. So I I believe that we should not be afraid of it but we should be open and start working with it so that uh we have our say in it.

>> I totally Sorry N >> that's how we like it. Go for it. Yes we love it. >> No no I totally agree. Uh but the the the key point here is when is the right time to do it because maybe now it seems a bit premature because now we are still trying to understand what Mika is regulating. Of course, we need to amend it or we need to improve it, but we need to find the perfect timing, which is not easy. And please go. >> Yeah, I mean I mean I agree that the law is fluid and if if the law never evolved, we'd still have the laws we had thousands of years ago. So, it's very important that we we keep growing and we keep analyzing. The problem is that

currently we have the blueprint for a house which is Mika. We've started implementing it and put up the first walls. If we change the blueprint now, you might end up with a shower in your kitchen. So, let's take it step by step. And in fact, there are clauses in Mika which allow for reports to reanalyze. I'm always open to a discussion that pushes the law. It's just that it's important that we make sure that we've at least started to implement it and we can take a lessons learned approach because otherwise we're just shooting in the dark as we have for the past 5 years because we never implemented it.

So yes, the law should evolve and we should analyze Mika in the same way that many other laws um I mean I I think we're up to I don't know which version of AMLD for example and that that shows progress that is good. Um so Mika 2.0 is good but it needs to come at the right time as as Marina said. Um there is a time and a place for everything and I think we should implement take a step back analyze and then push forward because otherwise you've got regulators and NCAs who are just starting to implement something and then it might need to change. You've got companies like ours that advise clients we've just started advising one thing

but then next week I'm going to have to tell you something else. I mean the benefit with EU legislation is it takes time to happen. Uh it's not going to change tomorrow. It's not going to change next week. is going to take a few years. So, at least that'll give us the time to to adapt. Um, as I said, the frustration is that certain things I would have assumed would have popped up earlier, but at the end of the day, that is also the process of of legislation. >> I do agree there's there's a matter of timing, but there's also a matter of content. And I don't think we should be naive because if for example the European Commission decides to reopen Mika soon and to push for uh Mika 2. I don't think that they will do it in

order to protect or help the industry. They will do it to protect the investors, the customers. So it means that um if we want Mika to u be helpful and to foster the development of the crypto ecosystem and industry, it also means that we have to be prepared and we have to um explain to the legislator and to the regulator what we want. And I'm thinking for example uh of the stable coins topic because um in Europe we lack um regulated and real euro stable coins with volume. So this is a big topic that we could push uh in the Mika 2. Um but I of course we we would be more at ease if we had more time um before Mik 2 and if

we didn't have a second version of Mika in in a few months >> in in France we know it quite well and stability does not help the business at all from a political point of view but also from a regulatory point of view. And clearly right now um even if Mika is a great improvement uh it has done been quite fast in term of the way we have been discussing with uh with the um the commission and and and the other people involved. Uh they did not necessarily listen to us uh as they should have done and the conclusion is um the text even if it's a great great improvement is

imperfect. there are a lot of things that are missing on the positive way and the negative way as well. Um they say nothing about define nothing about some uh some aspect but they don't consider also agency model which is something which might be very important. uh now we are talking about uh um uh how the stable coin could be considered as means of payments and so called uh under the PSD2 PSD3 rather than under Mica which sounds quite stupid in some way. So I think we need probably a pose uh put maybe on the table uh also with all the players the one that are really implementing and doing the job uh all

the questions and maybe also uh having more clarity around Europe um between regulators NCA uh regarding their interpretation of regulation. There are some countries in Europe where uh it's seems to be okay to uh work with USDT which in some way is just forbidden. In some countries, um it's okay to get your funds um not segregated and um put in an exchange mixed with whatever other funds and you could get me my car in some other it's not um you've got some people interpretating lending as a banking activity. Some others say okay lending is not my car so

you can do whatever you want and that's it and that's fine. So I think uh it's the right time to call for uh putting the things on the table and making sure that everyone in is is Europe is talking with the same um type of uh of interpretation because once again unstability when something are not clear it's not easy to develop your business and we are making a business. So um it's uh it's something that needs to be taken into account >> and NCA I sorry NCA's coordination should be the first step. I mean because what about the delayed statements uh from one NCA attacking other NCAs because of the more

soften requirements or interpretations. this is not helping the industry and this is not helping uh the credibility we want to provide. >> I agree. I'm not working for an NCA. >> No, [laughter] I know. >> I agree. >> Nicholas, you wanted to jump in on this? >> Yeah, sure. Uh we've all seen the statement from the the three NCAA. So, France, Italy, and Austria would like to have a centralized supervision as they said. But the the reality that the crux of the message that they're sending is that they want to have a high regulatory standard across EU. European Commissioner is supporting that and saying we need a better more integrated capital markets, more globally compliant

and competitive capital markets so that we could compete with US, we could compete with Asia. We need more competition and more competitive EU. So those are no noble objectives and would be unwise unwise for us to to stand in the way of that. It's not about the question central or decentral supervision. The question is that the fragmented markets within in EU are hindering competitiveness of EU are making the standards not even across EU and creates opportunity for jurisdictional arbitrage shopping for better jurisdictions and uh crypto companies they don't make money in in in finding a a a country with the lowest

regulatory standard. Our business is serving customers as best as we can compliantly sustainably so they get the service and they come back to us without us actually spending too much time on on choosing which market to get the license. So the single common high regulatory standard across EU would benefit everyone. Now the question is which route whether it's a central supervision whether it's a new regulation whether there's some regulatory standards that would come out it's it's a big question let's let's work on it uh and also agree that uh whichever decision is taken it's not rushed it's not made in a month or two

it doesn't damage the ecosystem it safeguards financial stability but the high standards high regulatory standards could benefit everyone. But uh ju just a second uh I I just of course I agree but I just need to disagree in one point because our perspective is different of course and we have a lot of clients asking the the first question they ask is okay what's the easiest uh jurisdiction to get the Mika license. This is uh the first question >> but that's but that's the wrong approach.

>> Of course that's the wrong approach. But is this the real is this what is happening now? But of course it's wrong. Of course. And this is what we need to try to avoid. We don't want this to happen. >> Over the last year as Mika has been implemented throughout Europe. The cash has been raining over consultants, lawyers, independent uh board members. I come from a small but very ambitious country, Lithuania. We had 500 wasps uh last few years. Every one of them needed MLRO, an independent board member. Half of Lithuania were independent board members. Fantastic opportunity for the ecosystem in Lithuania, but the competition is so much bigger than Lithuania or France or Spain or Sweden.

We're in the global competition and we need to be more competitive and the single high regulatory standard would help in us devoting all our resource resources in serving customers as opposed to trying to find a better uh jurisdiction with a lower standard. >> Yeah. And to add to that, I I do believe that a a common regulatory standard is ideal, but let's not forget we're what 9 and 1/2 months into me implementation. Some countries up till a few months ago did not even have NCAs appointed.

It takes time and it takes making mistakes and it takes you know someone doing something wrong and being told and that's a lesson learned. I agree we need a a central I agree that we need a higher regulatory standard across the board. The problem is if you have centralization then you go into into the the delegation of powers etc. So you have a million other issues. I I have had many people ask me throughout my career in this industry and even today, what's the easiest route? And my advice is don't choose the easiest route. Choose the route that once you're regulated, you don't need to go back because there's many and and we

saw this in Molto when everyone was hyping us up as the blockchain island what 5 years ago. When people showed up and they saw that there was actually regulation they need to comply with, everyone fled and they went to easier countries throughout the EU and abroad, they got the easier route and now they're scrambling and panicking to try to get a meal license. Whereas people who stuck to it and actually went through the process and became regulated properly are finding an easier route now. So yes, there will be easier routes and people are more than free to take them. But I my advice always is choose the best regulated route because that's going to give you the least change. The problem is that now we're trying to sell the EU as the best regulated route, but we're also changing the regulations

which shows uncertainty. So the thing that we're trying to sell that if you if you come to the EU, you have certainty, you have stability, it's being undermined on a different level. And and that is what sort of makes people jump ship. And that is what scares me. that will kill this industry before it's even born. >> Yeah, thank you, Mateo. And I'll just uh you know, it's a very easy panel to moderate as you can see because the speakers have things to say, they disagree with each other. Love it. Making my job very easy. But let me try and you know, sum up a few things that we heard so far, right? also cuz I think when people in the industry they're looking at Mika and they're wondering how can Mika be improved their reaction

will be you know that Mika needs to be less restrictive right easier for companies to set up in Europe to get a license uh lower costs of compliance we also talked about or we briefly mentioned the fact that M the Mika license might not be enough because if you're touching stable coins for example if you're providing transfer services for stable coins then you might also need a PSD2 license. So there is a lot of regulatory requirements that as we just heard are actually diminishing that regulatory um no on the one like the regulatory uh like the environment that we were trying to make appealing for the industry to come to Europe right we did Mika because we said okay well the United States has no regulatory

certainty at all. So the European Union has a very important opportunity to say look we are going to provide this regulatory certainty for the industry but now this regulatory certainty is potentially put at risk because it's already been questioned. Some of the issues that we heard is also in terms of as Mate was saying the license that a certain jurisdiction will give you. Uh it's also the the way that this is perceived by other regulators is very important. The statement that was mentioned earlier by the French, Austrian and Italian authorities is somehow putting in question the idea of passporting and passporting is the main principle of Mika, right? that you get

one license in one member state and because it's a regulation and because in theory we should have this common regulatory standards and high standards uh in the different approaches by the different jurisdictions that same Mika license can then allow you to provide and passport your services across the whole European Union but this is also now being put into question so I think that was also interesting for the audience to understand that when we're talking about Mika 2 is not actually to make it easier for the industry potentially the the issues the problems that they are being discussed or being thrown around as reasons why Mika needs to be reviewed already soon are the ones that we were talking about in terms of supervision and global stable coins and

the multissions so maybe we have you know the last 10 minutes last final round because basically what we you know the conversation that we've been having is all about policy versus progress right and I think Nicholas was saying it it earlier I think right or Nicholas as well Nicholas Nicholas apologies for that but like policy is trying to keep up with a very fast uh innovative sector it's like the probably the short answer to this is no right but at the same time there are processes there are ways in which we can adapt our legislation to make sure that is forwardlooking future proof and actually can be amended when things in the industry are changing. So let's use this last 10 minutes for last

round of uh of comments on all of these challenges. What like what do you think is the biggest challenge? What do you think should actually deserve um basically reopening MA already in a in a short time frame uh because you think that it's a real problem that we need to address and then if we have a last few minutes we try and see if the audience also has some questions for us. So big last round free flow as before. I I would love I would like to just point out it's not exactly what you're asking for just a little point here. I think that one of the biggest problems we are facing in Europe is the way that extra European countries look at us. Because when you

travel abroad and you try and you are trying to convince some uh crypto companies to move or to expand to Europe for example in Asia they say oof no Europe Europe is too complicated it's not worth it uh it's a nightmare uh I'm not dealing with MA. So we are really losing uh competitiveness here. We need to change this um this view because they don't want to come. That's the big point. Um yes and I I would also add uh there's another problem in the way that Europe is seeing itself and is considering itself. We are often seeing ourselves as a a market of consumers uh for foreign

uh players but we should also have our own champions and that's super important I think and uh this is why it could be worth it to reopen Mika um because of course we need foreign investors we need foreign companies but we don't um we don't need only that we need to have our own companies and one of the the topics that we are pushing at at the moment is the development of euro stable coins because this is key if we want to have a monetary sovereignty in Europe to have um euro stable coins that have volume um that are circulating within retail and within financial institutions and I think Mika at the moment is not helping

the development of Euro stable. So that could be um a real good angle that the industry could push for in a second version of Mika. >> Any gentlemen? Yeah, on on my side, I would I will agree with Melas about um about the fact that we need uh to be to be competitive in in Europe and this is a g global market and uh and we have to uh to take into account the evolution also in the US. Uh as you said Tomaso they were in late uh with the crypto regulation but now it has been changing and you have seen also the genius act for instance regarding stable coin. I'm not in favor of Micah too. Uh I I would definitely call more for like a

convention uh with um with the private sectors and some regulators in order to uh uh to put some stuff on the table. Uh and if we have to call for something for clarity, it would be for stable coins. Um the fact that stable coins could be considered as means of payments because of transfer and then we need in that case uh if you don't have one to have a payment uh institution uh license or whatever license which are not necessarily fully applicable with crypto because uh it does not apply with the same technology does not work and on the same time you are already mica so it means that you already fulfill a lot of uh compliance issue regarding crypto asset. It's quite stupid. So it's

overregulation. It's regulation for regulation. So what do we want to protect? What is the subject? So put the subject on the table. Let's discuss it and let's after see if it's DSP3 or if it's MA 2, MA 3, MA 4, Mika, whatever. Uh and we'll see. >> For me, I think a lot a lot of what we're saying is we're all open to discussion. It just needs to be done well. And in my opinion, I was just having a chat with Tomaso about this right before the panel. I mean, obviously there's there's great entities doing work like Blockchain for Europe and Nadan who are working to get the crypto industry's um views into the into the regulators um understanding. The problem is I think

the crypto industry, you know, we all want to be decentralized. We all want to be punks. We we don't want to speak to the guys in suits. I get it. I get it. It's cool. It's anarchist. I get it. But these are the people making the decisions that impact our industry. As an industry, we need to be able to push. We need to be able to lobby. We need to be able to consult. I mean, the closest thing to the crypto industry in terms of of of uh substance is the banking industry. And the banking industry has been lobbing the reg lobbying the regulators, you know, since since the beginning of time. Unless we're trying to play on the same uh level playing field, we're going to be we I mean the crypto industry is going to be run out of the room. So, we

need to make sure that we're getting our message across. We're getting our message across in a language that they understand because that is usually the the problem and unifying as an industry to target the main points. As Nicholas said, let's choose the points which are the biggest pain points. Let's discuss those. Let's grow the regulation where we need, but let's not get ahead of ourselves. Let's be realistic. Let's, you know, let's discuss and let's get our message across because it's useless for us to meet here, to meet in every other crypto convention and and and complain and moan that the regulators aren't listening to us. The message needs to go out and we need to speak to them.

>> Thank you for the shout outs again, Mattel. I appreciate that. Nicholas, >> I think a lot of, you know, nice things have been said. uh I would like to see less confrontation between the regulators and and the industry and uh often what we've been seeing in the last few years that whatever the regulator says the industry says no and then tries to work out something so I think that we should be listening to the regulators better understand the cause of their concern and try to work with them together for example they're concerned about the customer protection they're concerned about the financial literacy Our CEO this morning uh Miss Mazurka said that look guys let's cooperate on education

let's educate communities across uh European Union so that the financial literacy is such that they understand the products they understand the risks that they're taking and that the industry becomes much more sustainable and in that way we would make much even more influence on the regulators who are elected by the same communities and in that way the community that we're in would be much more sustainable in itself. So I believe that first of all less confrontation and and listening to what the regulators have to say. Two is working with them and trying to minimize those risks that they that they brought up and uh and number three is is building communities and I believe that

communities is the strongest power of crypto industry. This blockchain convention is is is a wonderful thing. It builds community, builds strength. And if you look at the largest global powers, right? They come from the source of communities. You like it, you don't. MAGA, make America great again, Tea Party, Conservative Party. Those are communities that bring the power. You agree, disagree, but this is the way that the power is constructed. Exactly the same way the crypto power is being constructed. This one is a great event. The one we had just recently token in Singapore, those who have been, it's insane amount of people that you

have there and they're all motivated, talented people coming together to build things together and I believe that these community building exercises that Tomaso and again Clara are doing is is is just wonderful. So, thank you so much. >> Well, thank you again and I think those are some very nice call to actions to also end our debate. Maybe not the one about creating MAGA for crypto. I don't think that's the way we should we should go about this. But absolutely I think very very important reminders there. I would love to get a question at least one question. He was the fastest. So let's go for it. Thank you.

>> You've been waiting for that. >> I was waiting for it. Yes, he was ready. Okay. Uh I have one question and one is for uh Michael, right? And Miga Marina. Yes. So it's about AI plus crypto right we all have been talking about crypto and legislation about crypto but we did not touch the part of combining crypto and AI. So how you guys are seeing this uh the part of the leg legislation about crypto and the other part of the legislation about AI working together.

So how do you guys see that working in in the near future? Well, my take for first of all, if the Mika regulation is complicated, the AI regulations are >> even worse. >> Yeah. Far beyond. So, uh if we are trying to mix, of course, these two technologies have to work together and will work together and are working together. complying with laws with regulations at the same time with two super tough regulations is super hard. I mean we uh we are not there yet in terms of uh legal from a legal perspective.

Okay, because the implications here are massive and and and the AI regulations are uh extremely difficult to implement. So I think that we will get to it but we are not now ready uh to be aware of the the the legal implications of it. Of course it will happen but I think that we need to go deeper still. I think that the question is spot on the gentleman that raised that the opportunities that we will have from uh AI and blockchain combination are infinite enormous in terms of product development in terms of customer service in terms of risk management in

terms of data management that comes out of it. So the combination of the two is just incredible and uh I'm pretty sure that we'll see exactly the same thing that we've seen with crypto that the business will go much further out and the regulation will be starting to catch up and I will come back to the point that it is incredibly important that we start engaging the authorities as soon as possible so that we actually work with them together and avoid the things that happen for example in United States where the crypto companies have been evolving and and making lots of services uh for the customers and then learning that perhaps the regulation or the license was not there that was supposed to be. So I believe that it's important that we start working with NCAs with

authorities in building the framework the legal framework so it captures it uh protects the customers but also doesn't hinder innovation and opportunities. Thank you. >> Yes indeed. Thank you for the question. I think uh we're closing off again on on the main topic right. Can regulation, can policy keep up with innovation? Again, the short answer is that it's complicated. But as you could hear today, there is a lot going on. There is a lot of discussions and the intention is there, right? The intention is to look at this very innovative web three sector which also includes AI and blockchain and all the innovative technologies and imagining how can we make the most out of the digital future the digital economy and how can we

regulate that in a way that protects consumers, protects the monetary sovereignity and the stability of the financial system but at the same time allows for this innovation to keep innovating to keep going and bring Europe potentially in a lead position in the web three race. So on that note, I think we're going to close here. Thanks everyone for listening to us. A big round of applause for our panelists, please. [applause] And thanks again to European Blockchain Convention for having us. Enjoy the rest of the conference. Thank you.