SEOUL, South Korea – A European Union official told attendees at the Korea Blockchain Week conference in Seoul on Tuesday that the Terra collapse would have been impossible under the regulatory requirements laid out in the EU’s Markets in Crypto Assets (MiCA) bill.
Peter Kerstens, a technology and cybersecurity policy adviser at the EU’s executive arm, said the bill’s proposed compliance requirements would ensure stablecoin projects are more transparent and able to redeem customer assets upon request.
“We don’t want people to blow up the system or just go bust without any recourse, as we’ve seen for example recently with Terra-LUNA, which just melted away,” Kerstens said. “MiCA prevents such schemes from coming onto the market.”
The landmark legal framework, which hasn't been made into law yet, aims to provide regulatory clarity to the growing crypto industry in Europe. The legislation – which policymakers agreed to last month after nearly two years of debate – requires crypto issuers looking to do business in Europe to issue a white paper, register with authorities and in the case of stablecoins, have fully collateralized reserves.
Regulators around the world are wrestling with how best to oversee the crypto industry, a matter that has become more urgent as the industry has faced a spate of collapses, liquidations and bankruptcies.
In South Korea, the collapse of Terra has pushed regulators to speed up efforts to come up with their own comprehensive set of laws for that country’s crypto industry.
South Korean regulators have said that the coming Digital Asset Basic Act will take cues from their legal counterparts in the United States and Europe, including MiCA, “to improve global consistency” in crypto regulation.