EU needs further efforts to implement crypto regulationsThe Netherlands government has voiced its concern over the increasing use of digital currencies in consumer apps and video games, stressing the need for stricter consumer protections in the European Union, especially for young users.
This move underscores a greater push for a tighter regulatory framework surrounding cryptocurrencies, ensuring they’re used responsibly and effectively, particularly within the burgeoning digital environment.
Netherlands’ call for stricter protections
As an increasing number of consumers delve into the world of digital coins for in-app and in-game transactions, the Netherlands government warns about the potential vulnerabilities, especially among children.
Making successive purchases can make it difficult for consumers to keep track of the total money spent in a game. This concern is magnified by the fact that software developers can manipulate the value of digital coins and offer varying digital items within a single app.
Notably, the Netherlands government isn’t only targeting digital coins but also loot boxes in video games, which are virtual items players can purchase with real money or earn by playing.
These have become a significant revenue stream for developers. However, their use can distort the economic behavior of consumers, particularly minors, who may be tempted to overspend when presented with the option to pay for a loot box.
This move from the Netherlands government comes against the backdrop of the EU’s broader efforts to create clear regulatory parameters for emerging technologies, including cryptocurrencies and artificial intelligence.
The EU’s Markets in Crypto-Assets (MiCA) framework, which was signed into law recently, was a significant stride towards this goal.
Moreover, the European Commission aims to lead in metaverse development to prevent Big Tech companies from exerting dominance in this economically promising sector.
According to recent estimates, the global market size for metaverse developments could exceed 800 billion euros by 2030, from a value of 27 billion euros in 2022.
It is in this context that the EU has been holding Citizens’ Panels, inviting EU citizens to give input on a vision, principles, and actions for developing fair virtual worlds based on EU values and fundamental rights.
MiCA’s role in crypto regulation
MiCA is a comprehensive legal framework that governs the issuance and provision of services related to cryptocurrencies, stablecoins, and other related assets across the EU.
Its primary objectives are to create an international framework of regulations to replace individual regulations in some EU nations, establish clear rules for token issuers and crypto asset service providers, and set up a new framework for crypto asset regulation where it is not already covered by existing financial legislation.
While MiCA is a broad regulatory framework, it doesn’t cover all aspects of the crypto ecosystem. It applies to individuals and legal entities involved in the issuance, offer to the public, and admission to trading of crypto-assets or those providing related services within the EU.
It doesn’t apply to the European Central Bank, central banks of EU member states, public international organizations, and individuals providing crypto-related services exclusively for parent companies or subsidiaries.
Given the rapid expansion of the digital landscape, particularly the integration of cryptocurrencies and video games, the Netherlands’ call for enhanced consumer protections is a welcome move.
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