Norway Should Quickly Promote Crypto Law: Central Bank Report

Key Points:

• According to Norges Bank, the country’s central bank, Norway should establish a national policy for crypto regulation.
• Norges Bank said that this would entail reviewing how the risk connected with DeFi should be handled until a single European regulatory framework is in place.
• MiCA may be applicable across the European Economic Area, but the central bank does not want to stop there.

Norwegian authorities should act quickly to build a national legal framework for cryptoassets rather than waiting for European law to take effect, according to Norway’s central bank on Thursday.

Governments all across the globe are keeping an eye on the European Union’s Markets in Crypto Assets (MiCA) law, which is about to go into force. MiCA may apply across the European Economic Area, but the central bank does not want to stop there: it feels there is a need to adopt particular crypto rules, according to the article.

“An international regulatory framework is crucial. Nevertheless, the Norwegian authorities should assess whether to proceed more quickly rather than wait for international regulatory solutions,” the central bank said.

The failure of stablecoin issuer Terra and crypto exchange FTX has also prompted authorities to accelerate attempts to regulate the industry.

According to Norges Bank, politicians should make use of current legislation that address systemic risk, such as enforcement measures. The research emphasized the need for crypto-specific legislation.

“We will face important choices when designing the payment system. Over the coming years, Norges Bank will study and decide on the future design of Norges Bank’s settlement system. At the same time, we are stepping up our work on a central bank digital currency”, Deputy Governor Pål Longva stated.

Norges Bank said that this would involve reviewing how risk connected with decentralized financing should be handled until a unified European regulatory framework is in place.

The European Union granted its final approval earlier this month to the world’s first complete set of regulations to govern cryptoassets, requiring enterprises that issue and trade cryptoassets to be regulated by a national regulator beginning in mid-2024.

To fight tax evasion and the exploitation of cryptoasset transfers for money laundering, the 27-nation bloc has also endorsed new regulations for tracking transfers of cryptoassets such as Bitcoins and electronic money tokens.

Norway is not a member of the 27-state bloc, but the regulations will most certainly apply to Norway, which is a member of the European Free Trade Association (EFTA).

Nonetheless, the central bank feels that additional understanding of crypto exposure, attitudes, and applications is needed in Norway. According to the paper, Norges Bank intends to assist in enhancing expertise in this field.

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