The European Union has decided to tighten its grip on financial infrastructure by including stock and cryptocurrency exchanges under its watchful eye. Previously, each central bank had its own "Prohibited" rules. From now on, a single lengthy directive will be issued in Brussels to ensure that no one gets lost.
This initiative is part of a broader strategy to enhance European competitiveness against the ever-looming US presence. Essentially, bureaucrats seek to consolidate their power, not only to monitor at the national level but to hold all financial activities within their grasp, denying local regulators the right to their own policies. It is a financial version of Big Brother, armed with Excel sheets and stakeholders.
A minor quest lies ahead: to expand the powers of the European Securities and Markets Authority (ESMA) so that it can oversee the largest cross-border organizations, rather than just fragmented national markets. In other words, bureaucracy is given the green light to resolve disputes between regulators and exchanges, including those in the cryptocurrency market.
Amidst this espionage-like saga, the Belgian depository Euroclear unexpectedly began unfreezing assets belonging to Russians without authorization from the US Office of Foreign Assets Control (OFAC). A Belgian license is now sufficient for such actions in Europe, creating significant discord in relations with the US. The art of investment diplomacy resembles navigating a turnstile when you have two access cards, but one suddenly becomes redundant.
The EU intends to monitor the pulse of financial markets around the clock to ensure they run smoothly and competitors do not attempt to advance their careers by circumventing European regulations. To sum up, market participants will need to comprehend the idea that market freedom means being freely monitored.
