What Is Going on Behind the Scenes – Post MiCA? | European Blockchain Convention

[Music] thanks a lot for this great introduction I'm very happy to be here with this great panel we worked hard and we decided to keep it casual though because we want to actually provide real answer to those complicated questions so for those who came to actually see maika the singer is not going to come we're just going to talk about the regul so you know be um so be prepared it's going to be sometime a little bit technical uh but we're just going to try to make it simple and make it understandable so you just raise some hands or make some noise if it's like too technical what about MAA we've been in this uh turmoil of a regulatory regulation time and now we approach the moment where the the law has been adopted it has entered into force and we can see the actual daytoday of Mika spawning the first question that I would like to ask my awesome audience of speaker is how do big and small most importantly stakeholder will will adapt to Mika what's happening past Mika um Stefan you saw probably many many cases uh during your the time you you work also with the white and case what what is your experience about the adaptation of those stakeholders uh to mik what's happening many thanks Gabrielle so in in my current role within white and Cas Lo firm as in my prior role when I I work in Bank uh as Secretary General of s Forge when I clearly seeing the the past few years until now what has been his growing trends of both institutionalsales and potentially also the issuance of crypto assets within EU is really both this institutionalization of projects and therefore if if we speak about stable coins uh my my prior firm as Forge has issued with circle one of the the first eony Tucker into the the EU so we clearly see this trend towards many institutional to issue stable coins to assess what would be the the p&l and the use case with regard to to these assets but also various maybe uh less unnown but very Innovative uh Banks and and actors precisely uh wanted to Foster about being first into the market with regard to this new kinds of asset given the fact that there are many USD stable coins and very few for the time being Euro stable coins and why is that well is is there like a hedge people all wants to be like on the dollars and you know but I think the the vast liquidity was in the US so uh due to this only fact it the there was various Project based uh from based on USD and um I think also the the maturity of the project was much more powerful into the the us maybe be on onto the the US prorip I I will let uh Patrick have a have a word on it but it's true that now that the European uh Union is positioning himself on this new kind of issue they're not promoting but they're somehow defending also the EU and potentially defending a a more gradual role of Euro based table coins besides that very interesting already existing USD stable coin so they're they're kind of enhancing that possibility both by major or smaller regulating entities but also from key uh Innovative firms such as Circle such as other uh firms into the EU that are precisely grasping this Market how complicated is that to get uh a license so I I guess for a big stakeholders like Circle um what did you have to to run through was it super complicated do you think it's uh challenging for like a small company to kind of compete with you what do you think really oh undoubtedly there's zero doubt about that even for that it was you know quite a long journey quite a process um so by the way happy to be here in in Barcelona for the first time at evbc um this year it's like perfectly timed for us at Circle because we just launched our MAA compliant tokens both usdc and also EC in early July and we're essentially the first major Global stable coin issue to have reached that status of being a m compliant e-money token issuer but let me tell you that like wasn't an an easy feed it was really a process where over the last 18 to 24 months we were going through the necessary licensing Pro procedure uh we did it out of France together with the acpr but we also had regular conversations and discussions with the EU Authorities on those topics and I mean it's safe to say for smaller startups it's a challenging project you you're not going to launch an algorithmic stable coin then you know we can all be reassured on the fact that uh it's going to be an e-money regulated do you think it's a it's a hedge on the market today to say that now that we have MAA you have like a regulator looking kind of behind your shoulder and kind of ensuring that those rules that are you know developed now now are here do you think it's an advantage it's a hedge uh for you for us being a regulatory obligation yeah for us at Circle it's really been the continuation of our I would say regulatory first approach globally speaking um already two years ago when I joined cira URC was just being launched as a Euro denominated stable coin we committed to you know onshoring that issuance as soon as MAA enters into application and luckily you know we we were able to keep that promise URC as a Euro stable coin is now fully issued out of our regulated French entity fully reserved and managed by that entity and for us it was never even a question for us it was you know just the Natural Evolution of the industry its integration into more regulated traditional financial markets in the European Union and so far we I I I think our strategy has really worked I mean better than we could have expected if you look back the last two months URC which relatively speaking don't get me wrong is still rather small like any other Euro stable coin but we have seen a 60 to 70% growth in the last two months um it's grown to roughly 60 million it's now by by far the largest regulated Euro stable coin out there and we're doubling down on it that's that's amazing Bianca do you have any any takes also on this yes I saw you sure congratulations to you guys of course and and it was wonderful that you said Patrick that it's extremely complicated because if it's complicated for somebody like Ciro as big as they are Imagine for small startups right so I think we're full of lawyers here and we can go very technical but I would like to to make a plea here for the founders early stage it's very important that we keep in mind as regulators and policy makers how can we make easier for Innovation to come and stay and Thrive so MAA is wonderful it brings transparency and harmonization to the EU but it also brings a very high threshold of capital requirements if you are if you want to issue a stable coin in in a You country and lots of other uh very high requirements as well that an early stage uh Team might not be able to to meet so I think it's important when we continue to work with the member states and how they're going to adapt M to keep in mind that not everybody is going to have the team and the bankk accounts the circle has so what's the option if uh you don't have the resource to necessarily go into this pound of the Regulatory Compliance are we going to see more decentralized stable coin like popping up what what can I do if I'm a passionate entrepreneur that really wants to create a stable coin because I want to change their real money economy very good question and of course there are options out there and I'm I'm biased because near Foundation is based in Switzerland but Switzerland has been crypto-friendly for a few years and FEMA the the regulator is very flexible and has a slightly different approach than MAA so with fima you can have for example instead of the capital requirements you can have a default guarantee with the third 30 part bank that allows a a smaller stable core issuer to come into the country and and be able to operate so that there are options out there um I'm also willing to actually turn to m because you deal with stablecoin on a portion of the the the the regulation that is actually super important that is AML everything you know everybody heard about the travel rules and didn't get much excited you know about that uh so what's your take on you know those issue that now has to comply not only with the licensing requirement but also from the AML perspective and by the way there were some crazy ideas about like you know how we should Implement AML uh we got to this stage what do you have to take what what's your take on uh the AML and the stable coin yeah thanks for starters it is very it's a welcome development in terms of you know the industry moving towards you know crypto being from like the Wild Wild West to now being like regulated where we care about like AML where we care about know where funds are coming from so it's definitely a step in the right direction um in terms of the approach um or like my recommendation from that standpoint would more be for anyone coming into the space to come with the mindset that you're going to have to comply and by complying you're you know there's a saying that says compliance makes the finance world go around do you think it's fair you know like I I hear a lot people actually talking about the fact that we are making it harder for crypto than for cash by the end of the day like stable coin it's kind of meant to be this digital Bearer title um we apply different rules by the end of the day do you have a take on that or and also do you think it's complicated now to issue from an AML point of view a St coin I don't think it's complicated I do think that with new technology or when you're like applying like old technology to like new Concepts there's always the initial period where there's some form of like friction so a lack of understanding a lack of like strong technical Partners there might be a couple of reasons or just like a resistance or push back from the market itself so it's not so complex as it is and if we think about like when the Swift system was being implemented like you know 40 50 years ago there were these tetin issues I would say um but overall 5 10 years later everybody's on the same page you know we're settling transactions um we're processing transactions smoothly like in many seconds without even thinking of the underly technology or underly checks that are happening and there are a lots so yeah so it's time for the technology of blockchain to become simous if I understand you correctly yeah um next round of question will be uh much around Circle I'm sorry Patrick um but being you know uh the elephant in the room I'm talking still about Circle the question is really about how do you see the look ahead so you're in this expansion phase um um I Heard recently your CEO saying you know tackling also the challenges of having this Global C currency it's quite quite new actually to really think of a global currency in its design what will be the look ahead for Circle in the next five years with the MAA and with everything happening yeah so I think obviously usdc it's a globally liquid global accessible token it's the largest regulated stable coin overall with like roughly 36 billion of of Supply out there but I think independent of its like broad adoption at the end of the day any stable coin is inherently Global it lives on public permissionless blockchains it's internet native and so even if we're talking about a smaller stable coin at the end of the day it could land up anywhere right even like any token here in the European Union is inherently global technically speaking and so when it comes to the European Union for us I think we're looking into I would say various growth verticals that we see a lot of potential um so for one there's the crypto Capital markets that's where currently stable coin usage is the largest and I personally expect a huge shift in Market structure in those crypto Capital markets in the EU because what we will see over the next couple of months and into next year is that all those exchanges those MAA casps as we call them they will only be able to list those stable coins or those assets that have been authorized also under EU rules and so the liquidity that currently sits in stable coin pairs that are potentially not compliant with those EU rules will necessarily shift into other pairs the market will evolve and we see a lot of opportunity there both for uscc and also URC that's the crypto Capital markets part beyond that now that stable coins are really tightly integrated into the financial system and regulated at the end of the day similar to existing e-money they are e-money tokens we see a huge amount of I would say more real world connected use cases around payments crossb payments remittances but also Capital markets payments where those regulated tokens Can now be integrated and used um that we're very excited about about and we're like pushing those together with a lot of Partners some of them are here today and we believe that we in the in the European Union for our Euro stable coin but for Euro stable coins overall we can expect a a at least you know a a a significant growth over the next 12 months let me ask you the question that way if you could actually modify some aspect of MAA what would you change what do you think is eventually not really tailor made to actually your activity I know it's a tough question uh feel free to answer it the way you want but I I think it's interesting to highlight also what can be improved in this post MAA time that we are going to witness because probably the the MAA regulation will be refined if not directly in the text at least in the practice so what do you think could be an evolution It's actually an open question if someone else want to actually it uh I don't mind yes H so so you correctly mentioned Patrick that the EMT license is essentially an Emi license which is quite a heavy burdensome process to go through um uh so essentially if you're regulated as an EMT uh you have the same rules of the Emi which apply to you however there are some nuances which aren't really addressed in the regulations so for example if you are an EMT issuer such as Circle uh the law doesn't allow you to offer into interest on the on those coins however third party platforms such as defi platforms can offer interest um uh which is obviously very attractive for the for the defi Market Market and is widely adopted uh so that's not really addressed in the regulation uh which is of course very interesting for the market and positive because it allows it to flourish and be used in that way so you're sort of trying to put them in a box when it comes to the application uh and and the processes but the composability of the tokens themselves and the environment in which they operate is completely different because if you have an Emi license such as PayPal effectively you operate in a worldall garden system so it's just you know one institution to the other if you have an EMT token you can basically transfer this token to any third party any uh non-custodial wallet any defi market so the way in which they operate is completely completely different which is not really addressed in terms of the ripple effect of how they're used that that's an interesting point everybody wants to be on the D5 because they want to have their money generating interest especially Us in Switzerland it's complicated with like the interest rates uh do you have any take on this like do you see a future post M where we will have a little bit more leeway with regard to this activity that was usually a banking activity you give me money I give you an interest for you know the money that that we put it it has been like kind of cancelled you know by today's uh Financial standard is it a way to get back at this with crypto do you have any take that's a very good question and the the honest answer is I don't know probably probably we'll have yeah yes there's lots of things that we have now post mward that we're still figuring out right and and so are the regulators and the member states so I think if it's going to be the market the market will decide depends on the pressure of the the consumer base is the more people use it they want to have their advantages they are similar to the traditional Financial market so maybe and I hope so but we see it's technically super feasible to actually see a public address and say okay I'm going to vest like 4% I'm going to invest in American treasury bond maybe we should invest in European treasury bond too um what what do you have a take on this like on this token that you know would actually generate you an interest that would be a stable coin is it like many of the use case that you see coming into your office do people want to actually propose that to the client actually from our perspective into the low firm we we make it possible but we we can't create the p&l for the firm but uh we we we do as as much as we can to structure the Assets in order to to make it to make it possible it's true that for for stable coin the the the issue is will be related to adoption we are already in U in some kind of a new new currency competition where you would have potentially uh money market fund units you would have to some degree tokenized deposits stable coins and besides has what what Patrick has said about digital Capital markets the potentially one big issue would be what is the adoption of stable Co within Capital Market and and so that there is this old debate about uh with stable coin beyond the pilot regime could be used for collateral management could be used for various Sho cases where where would be really relevant and what would be the best Market practices or assets and and there is this competition that that will emerge and potentially there would be some public policy to do with regard to the evolution of the role of EMT into the EU and is supposed to have made things simpler we now have definition we now have you know clear categorization um I'm I'm turning to you actually just in regard to this definition that was actually set into Mika do you think the situation now has been made clearer uh we talk about you know also alternative investment fund like you know it has an implication of the qualification of the token by the end of the day um long question short would be simply to ask you what do you think as a legal professional of the definition is it clear uh to everyone someone entering the market I I guess it is clear they they basically divide them into three or four categories uh which is stable coins divided into EMTs which are just Fiat backed assets uh the same way emis are regulated so one to one claim against the issuer fully redeemable um and then art are stable coins which derive the stability from a basket of Commodities or assets and those are the two categories which are heavily regulated in terms of needing a proper license and not just let's say a registration and then the third category is crypto assets other than arts or EMTs so it's essentially utility tokens and for this all you need is um EU registered entity uh white paper in line with certain requirements and for safeguarding they have to be held with uh a bank or a regulated custodian so those are the three Essen categories and then of course we have security tokens which are financial instruments governed by esma and miid in the same way that in practice does is there like complication happening when you say okay I want to issue this stable coin it's going to be stable but I want to give an interest does it create necessarily a security or how does it work is it a derivative we saw a few use cases of people wanting to tokenize gold or other things do do you have any take and then I'm happy to actually turn people are trying to get creative with business models instead of one to one make it floating for example um however there are a couple of recital in in MAA which sort of make it clear that even if you try get creative you will you will fall within the category of an EMT or ant so there are some wide uh Provisions which try and and group um and catch all the creative business models obviously we will see how the competent authorities will you know treat the these different creative business model but I think they will be caught if there's a centralized party behind it for sure so it's the same question for you Stefan we have now this clear definition you know article two with like tons of of things tons of also um inclusion or exclusion amongst like other realm of uh the the the the regulations so for example e-money directive all those other directive have have now been you know kind of harmonized with MAA um is it is the situation clearer though in practice I I I I think it can't be perfect but at the very least it provide the a similar definition within the entire Union for the first time when we see classical typical markets uh for example miid you have just a list of assets but each member state has its own definition so for example what is a bond uh you you know the basic definition but each country has its own definition in the secr law and so that's one of the reason why there are difficulties to have aggregated Capital markets with the the the mica it is a regulation so you have the same definition dma would provide handsome approach with regard to their interpretation so for example it would be easier to Define UT token in a broader crossborder sense for to some extent even though the word does not exist virtual currencies would be somehow defined as time goes by more more closely uh it's true that with regard to to stable coins and some Innovative tokens there would be always a gray area because Innovation moves quicker than regulation how we do we'll have a utility governance token that is a stable coin at the same time how does it work I have if if you have a hyrid to for you if that's okay you have a question I me that's of course I understand it's very clear if you have Meed you have a list but what happen if you have a token that in one member state looks a lot like something that would be under mythed right how how are we going to deal with that contradiction on the MAA uh it's a question for not for me I mean it's was for I I think I can partly respond that the at the very least the intent of I I cannot speak on behalf of the dma of course but the intent of the esma is really to to Foster as as much as they can do a shared approach into the interpretation of the asset so maybe with regard to the the most famous crypto assets there would be a shared Vision about what is or not uh Bitcoin ethereum uh and the the main crypto assets but you true that for many Innovative tokens there would be this country by country Case by case and that there there would be some need of lawyers potentially so now now is the time where your CL client say okay where should I go that is will be the the most gentle jurisdiction to my very exotic stable car no structure maybe I know we have several uh jurisdiction that are actually present uh you guys decided for France you're also a French lawyer we have Malta I know that Malta had this amazing uh be before everyone else that they released Bill uh that really tried to tackle this whole like blockchain industry where do you think um we will have the most comprehensive authorities Because by the end of the day the Mika regulation will be implemented on a Case by casee basis in each country so who will take the lead where should I have my stable conin project I'm happy to on this topic of really going on behind the scenes and exactly what the title says cuz obviously Mika has passed and all the competent authorities are trying to transpose and transition into this new framework in reality the only two countries which are aligned are mtan France which are let's say MAA compliant um and all the other member states are still yet to begin their Journey um into transition and and in my opinion there there's a big mess so there's a lot of operators which have a vast license in these jurisdictions will probably continue to operate under the vast license under these transitionary measures if they didn't apply for a license which is um already in a mea compliant jurisdiction um and they won't be able to passport so you have a lot of fragmentation in Europe in terms of operators and their abilities to continue operating in Europe uh in Malta for example uh q1 of this year we had an influx of play apply for a license we had around 50 applicants um with the promise of the regulator to uh give a license by the end of this year if you manage to submit the application by August some people made it some people didn't for the people who didn't they lost investment uh so they're looking for alternative Solutions um so there's a lot of uh you know sort of consequences and effects of what is happening per jurisdiction some people will manage to continue operating um and transition to M and passport some might have to seize operations some might lose investment some might continue operating in that jurisdiction but not passport so the ripple effect and the reality of MAA behind the scenes is actually very complicated and not super positive in my opinion I want to give the Stefan the word and I'm then interested to to hear about EMA and Bianca about you know what they see in practice and you know whether also stable coins might be done somewhere else stepan thank you very much so as with regard to the choice of the relevant jurisdiction I think each CEO entrepreneur has really to to have a a clear mapping of what they want to do so uh with regard to the choice of jurisdiction within the EU it's first what is my client base uh where is it mostly located second what are potentially my main Partners am I willing to have Partnerships with banks with crypto players and depending on on that the choice of jurisdiction really matters if you're choosing some countries where Capital markets are lessen lessen known or developed or some major uh Capital markets it will potentially depend onto that that kind of Arbitrage uh there will also the issue about the maturity of the regulator uh there many countries that are positioning themselves but are there clearly an into position to understand your your needs your problems in order to assess it and be in capacity to respond quickly and so that that's that's the ma main question potentially to be in capacity to respond about either as a Casp or as a potential stable coin issuer where you want to to find the the good leverage the good jurisdiction I I think it's a super interesting question that I want to just direct one second to Patrick because you actually made the conscious Choice uh besides wine and cheese to go in France you know among the advantages that you could find um what was the main reason why you know do do you concur with actually what Stefan said about like you know we had this it was easy to talk with the regulator we find the relevant partner like what was the the main uh reason why you actually picked amongst the member State France yeah there's there's a variety of reasons uh wine and cheese are definitely among them get you um no but um so the top reasons for us where a major reputable European country secondly an innovation friendly current Administration under the president thirdly a strict but very experienced and knowledgeable supervisor we're not the only ones doing a stable coin out of France other startups banks are doing it Stefan's ex employer and so that helps when you're not the first ones and they the supervisor actually already experienced in topic and last but not least also a huge crypto ecosystem around major events with a ton of developers that allowed us to quickly build up an operational team overall a world of possible but yeah okay great um we discussed a lot during also our preparation call about yeah but what about if po Mika was a time where people would actually find option b more attractive and I want to uh redirect this question to actually mea and bianka um do you have in your everyday practice also people who wants to find like easy solution and sometimes the easy solution are actually outside Europe and when you have a worldwi project what about uh you know settling in Dubai I mean you know if it works what you see the how do you see also this like International competition yeah so I can go first so it's it's two things and we saw the first one when like travel Ru came into play in UK we had a lot of like regulatory Arbitrage you know we had companies who simply just up and left and went to MAA or went to EU for example and obviously now there's you know there's a taking time bomb you know there's deadlines we're counting down and you know within the one year plus that they've had they should have been able to you know Shipe up their books um and prepare if vasp or casps as still not ready at this point there will be some that would move um but the most important thing for you know a number of these players is if we look at the underlying things we're trying to achieve with like MAA um not just from like a stable coin issurance perspective but from like an you know AML perspective from like you know consumer Duty perspective on the base level you know for technical level it's pretty much very similar um across board so while they might move jurisdictions when it's time to switch back or EXP fund so to speak um MAA has already given that framework where there's like a you know crossborder H Harmony in a way so it will be somewhat easier it's not going to be a hard to go back than it is now where they're trying to figure out where can we go in a limited amount of time M yes I think you you guys rais very important points because of course when you're setting up a a project is regulatory Clarity is extremely important but also there's so many other things that are founder needs to think about right taxes economic substance how do I set up a company do I need to have a present do I need to have local service providers so I think other jurisdictions have been uh working in this industry for a long time we heard earlier on a Pano about us UK and EU the the main regulators and policy makers have been scratching the heads for a while and Regulators in the Cayman in the BVI or in in Switzerland and even uh Abu Dhabi in the EMA have been saying okay no come here we can help you we can set up a framework we can give you office space we can give you fiscal benefits and we can help you find and keep Talent so I think there are other players out there that could still be attractive if ma becomes too complicated but also I think it's a great opportunity for the the EU right for them to come to to to seek the is in that particular member states let's create incubators let's create accelerators in the EU let's bring the The Innovation let's make sure we have an attractive place for the founders to come and stay and employ people locally but also be able to employ people globally so I think and if they come they will have the framework they will have the harmonization and they will have the passporting which is so so important so I think yes the still grass GRE elsewhere but we can work on ours to make it even better will it make a difference by the end of the day if Dubai had the perfect stable coin you know from a regulatory point of view it wouldn't help because you would still be able to actually comply Mika maybe we can talk a little bit about the scope of Mika in a few words when do M applies to me when I actually am a stable coin isser I think I'll leave the stable to Patrick and Stefan and Justin because I like the utility token side I like the tokens that come and bring products and services yes Justin do you want to answer this so basically if you're targeting um Europe if you'd like to list on a European exchange or use a European entity such as a broker or custodian in fact one of the Ripple effects we're seeing post mea or stable coins is the D listing of certain stable coins on certain exchanges and certain operators such as teder and a few others uh so basically unless you're operating under the premise of reverse solicitation if you want to Target Europe or admit to to trading in Europe or is on a um exchange you basically have no choice but but to obtain a license and to your previous point in terms of which are jurisdictions to go to uh till a while ago there there could have been some jurisdictions which you could safely operate from without obtaining a license let's say the SE shells or or certain other jurisdictions but but now even offshore entities um offshore jurisdictions sorry are regulating like there's a new regulation in sells as from January so unless you want to set up insane kits and just um operate under reverse solicitation you're going to have to get a license somewhere obviously depending on on where you targeting so there is no way around the law no just one quick addition well interestingly enough for Euro tokens so Euro stable coins MAA even goes further and has like an extra territorial scope so no matter where you build your Euro stable coin from you could do it out of South Africa or the Philippines you will be treated as offering that token directly to EU consumers and there's no way around like circumventing MAA or so that's like some people don't know it but if you if you if your business is like launching a Euro stable coin you need to come into compliance with MAA or already today you're actually an illegal offering of that token and and this is probably also applicable to to any other currency because any country that has you know like its own currency that is issuing its own currency SS Frank you know wherever would see a potential com jurisdictional link with him do you want to yeah I just wanted to say that of course Founders want to comply right it's not about circumventing regulation it's about having Clarity understanding what they in for and being able to comply with regulation where they decided to set up so I think the making it easier and accessible is is much more important than just having a piece of Regulation that is going to crush everybody but again I think MAA is a fantastic thing and we should definitely make it work I wanted to also ask Stefan about you know we're not necessarily right now in this post Mika uh period we're still already very much more into this transition period you talk a little bit about the the vasp about the process where are we at in this regard if you can give a few highlights yeah yeah uh so there are actually three possibilities either you if you want to provide some services on crypto assets within the EU to to EU citizens either you are not regulated at all and so you have to fulfill the the whole process of being licensed by a National Authority into the EU as a Casp service provider or you are already uh registered as a vasp by uh spe one of several uh EU member states and so you you benefit somehow in these specific member states of a grandfathering close and so in suchar countries you are allowed for uh 18 month to provide SE Services before being required to license so it is it is useful for actors which are already registered but somehow limited to this bound is so it's both a possibility and and a limitation and the third possibilities is for regulated actors that provide currently regulated Services notably on financial instrument and if such actors either Banks investment firm asset managers want to provide the same kind of services but on crypto assets they benefit from a simplified procedure by uh should I say a simple notific ification to the local regulator by into a matter of 20 days uh be becoming a Casp so it it's I'm talking to a lot of banks it's it's it's it's it's it's um it seems to be really simple but it requires a deep deep assessment prior to this uh notification we discussed also during um our preparation call really the the we were p wondering and maybe a little bit being Phil philosophic about it because nobody can predict the future of course we're all like uh very bullish but let's be honest it's a gamble um the key point is to say that maybe Mika was was some kind of also a Gamble and right now when we kind of discussed that in between us and we were wondering what will be the situation in the long run of this regulation um it was difficult for each and everyone to be absolutely optimistic or pessimistic about the the future I want to give a little bit of this uncertainty you know it's not it's always you know the legal debate like you ask someone to give you like a clear legal answer and the the key point if it's a gray area and we don't necessarily know it's by the end of the day really much more social science that is low um do we think that actually this MAA is going in the right path are we really building you know like the the the the next uh Level Playing Field for stable coin for this is this is this going in the right path and I wanted to ask this notably with regard to the fact that the world evolves uh we're in the old continent it Bears its name itself are we going to like see the most innovative stakeholders come out of this regulation I'm happy to open the the this question to the whole panel um maybe Justin do you wanty to to say some comments um in reality I think the next couple of years are going to be quite turbulent in my opinion cuz most of the competent authorities are not ready aligned or transitioned in any way so they will probably operate under the vasp transitional measures which will buy them sometime but they still can't passport if they were lucky enough to apply for a license in mtan and make the relevant deadlines then they're lucky um but in reality it will take quite a while to get there in terms of operators being licensed passporting and as flourishing from from the regulation itself so I think it's going to be a rocky ride and it will take a couple of years till we be the real fruits of the scope of MAA um M yeah so just to chip in I I think it's going the right direction um for a couple of reasons obviously like if you look at the underlying ideas behind Ma they're very solid you know it's like travel R it's like anti fraud you know customer care you know all of that very fantastic however what we will see you know when it now comes to like boots on the ground you know actual like compliance officers or you know policy makers trying to implement this will be a bit of a very fragmented approach and the only way to overcome that will have to be like working hand in hand with like Regulators I guess it's not a case where Regulators you know put out an article and then go silent for 6 months you know it would have to be like regular maybe 3 month checkins audits friendly audits um and so on and so forth yeah thanks I second what you both said I think it was a great first step but now the next few years are going to be bumpy so the the fundamental point will be when those friction points arise how would the Regulators react right how would the member states react are they going to we welcome uh the challenges and deal with that in a positive way or are they going to just push it and say no more regulation is the answer so I think we it's a wait and see situation but I am optimistic Patrick are you optimistic of course of I mean I I see it as an opportunity you know just taking a step back as a European also looking at you know recent developments these these last couple of years Mario dragy recently pointed it out in his report we have not been very good at creating Innovative companies in the EU be it in the cloud space be it in the AI space I think for crypto since regulatory Clarity one harmonized framework plays such a great role I do think that having that framework in in place right now earlier than others could be a competitive Advantage right now the largest crypto companies don't come out of the EU um there either Americans or Asians but with this new framework in place I think at least those startups will be able to scale instantly across a single Market of 450 million users I think at least they have you know not to live with a fear of like an enforcement action that can could come at any time so I I would really see that as an opportunity but obviously the implementation needs to be pragmatic the supervisors have to play an important role um the policy makers need to be reactive and adaptive it's just a first step we figure out as as Justine mentioned there will be so much friction and a bumpy road ahead what doesn't work needs to be adapted quickly so we really need to treat that regulatory framework as like a product that will adjust along the way but like broadly speaking and we might be able to meet again in a year or two I hope that in two years we'll see large Euro stable coins we'll see large European exchanges operating across 27 countries R will see large liquidity on those exchanges and so hopefully we'll get there but at the end of the day it depends also on all the companies and people here Stefan what's your optimistic or pessimistic view yeah really optimistic because when you see potentially the the aim of the institution it was precisely to not repeat the the errors of the past when you see secre markets they are really secr because in itself the market infrastructure have been structured in a national way the Securities laws are defined in National level and therefore if you want to agregate to single Market it's really tough because of this Legacy of Decades of national histories for payments is the same now with MAA there was the aim to say okay before each country having too much Legacy on the national laws we provide the single setup and so we provide the possibility to adapt of course maika but at the very is to have very early on and at the first uh the first from the OCD to have this aggregated rules and and and assess as time goes by but very positive and for the 30 last seconds that we have uh just want to leave the floor to Bianca uh to discuss in a few words that uh what will be the future Mika was actually just step one we often forget about this what about like step to in a post ma there will still be MAA yes I think we heard before about maika 2 and how to address Defi and what level of decentralization is fully decentralization but I think we should just wait a bit not rush into anything I agree with the previous panelist to say let let's see how this goes Patrick put very well to said okay let's use it as a product me Cas a product version 1.1 1.2 let's make this one work before we rush into another set of uh regulations that could bring more problem and also this industry runs so fast if we're going to take the next two years thinking about defi on a MAA 2 well in two years time everything is going to be different so maybe let's work on implementing this one before starting another one this is a story to be continued thanks a lot you can 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