Regulation Panel

Transcript

[Music] How's it going? Are we good to go? Hope so. Yeah. Yes. Hello everyone. Uh welcome to our regulatory panel. Uh today we have amazing guests. Uh we have um Radim Kosub, a fellow colleague, attorney at law from uh Czech Republic, specialized for blockchain law. Uh we have uh Andre Kovarik um member of the European Parliament and um his focus is on capital markets uh in the EU among other things. And uh we have Yakimarin, principal economist uh in the European Commission who was

deeply involved into legislative pro process of enacting Mika and now uh his uh on um events like this um giving his uh perspective on uh where do we head uh with Mika further. Uh so welcome again uh and let's uh kick off with um general general question about Mika. So uh this piece of regulation uh is uh well underway and effective. uh many companies file for um different licenses and um what's your feeling does ma um brings what was promised to bring

more clarity uh more compliance um legal certainty or it's still early to uh to to see their effects its effects um Andre let's start maybe with you Should I start first? U Thank you very much. Good afternoon everyone and thanks uh for the invitation. I think uh yeah that's a that's a very good question. Um I think at this point it would be um um quite uh courageous to speak about you know Mika bringing stability because um many companies the businesses are actually struggling to put together uh full compliance regime uh with uh with it and and I think it's it's completely natural is a is a new piece of

legislation regulating activities that were that have not been regulated before uh in many areas and uh I think it is fair also to say that it's not only businesses uh that needs to go through this first experience of uh uh makea compliance but it is also the public administration side so the supervisors the supervisory authorities they are building their expertise they're building in their teams uh and I think it's it's honest to say that it it is actually different from country to country uh different member states are approaching this in a different manner so you can have companies with a very good experience I would say customer experience you know having um uh very communicative and approachable uh supervisory authorities and on the other

hand uh some of them that are very conservative that are not very open to to communication and where things are taking u very very long. So I think this is something in my view which is natural comes with the implementation of new piece of legislation. But I think what we should do also in terms of uh our work uh as European and then member states institutions is just to make sure that first that we um look at the good practices. So the best practices of those that are actually already present in the market and and trying to make other aware that these things can be uh happening smoothly and also uh if there are some frictions mainly in the harmonization uh in the uh regulatory practice to make an effort uh to

harmonize them. So let let people talk and share you know the good good experience and practice because the the sooner we get into let's say regular regime of mika implementation the better for also seeing uh the positive impact uh on the grounds. Yeah Kim do you want to comment on this? Yeah, I think it's very interesting always to see what people actually from perhaps outside Brussels understand or think when they hear Mika because what most people do not see is the process that is behind actually having a regulation out and that's completely different from other

parts of the world. I mean I hear very often uh that they compare mika with what they do in Dubai or Abu Dhabi or Singapore or wherever on the world and then why didn't you do this and why didn't you do that? Now what a regulation in the European Union is is basically a sort of uh very ingenious piece of harmonization that basically approaches sort of global harmonization. I mean we have 27 member states plus three associated countries. So 30 countries that have to agree on a text and that means governance that have all different colors that means the European Parliament that means national parliaments and then when you have done that on the basis of a technical

proposal you get all the European and national regulators in with the level two standards where uh in my opinion then the mess really starts. Uh so we have a seven-year process to get ma uh because we are always asked to put things in writing and you guys you know that I mean that's already from school and then higher education or whatever you did for for for your job when you start writing down stuff it's not that easy because uh as as as good said I'm from Germany so I couldn't I couldn't find the time today to write you uh uh what what what's I couldn't write time to write a short letter so I wrote a long letter indeed because short letter requires thinking about each and every work and that's what you have in a

regulation and so you have a technical proposal then you have the trialogue discussions and then you have the level two standards and yesterday alone the Frankfurt university we spent a whole day only discussing technical tools to uh measure the energy consumption the power supply when you create tokens that's one tiny part of the level two standards which is huge so by definition uh Andre I don't know if if you can agree to that But by definition, you cannot have a perfect regulation or a good regulation. What you have is a best effort that honestly puts on paper of what your knowledge is knowing perfectly well that at the moment that it uh stands there, it's already in part obsolete. It has been overtaken by certain results, it is not exactly what

you wanted. Uh but that's the nature of regulation and the alternative is I would say chaos which I love very much for for Dows and DeFi and stuff like that. But of course to have established financial players that want to make a business model and lead legal certainty, they prefer bad rules compared to no rules at all. And that's the reality. And Radim, what's your opinion uh about effects so far from practical perspective as you are in day-to-day contact with clients, different projects? Uh thank you for having me and thank you for this question because uh what I can say or speak of is the experience in the field of the practical

life with Mika today and uh it's something between sad and uh well very bad maybe terrible because um well what is the what is the point? What is the problem? I think it's uh that uh European institutions maybe also many of regulators failed to provide like sufficient information preparation yeah and some kind of training because what what actually happened is that you have completely unregulated sector industry which many times came from the let's say very roots very very like startup style environment and suddenly uh you tell

them all right guys you have two years to become compliant with more or less like light banking regulation in terms of difficulty. Uh so I think in such a case um you should definitely put a lot of effort into some education into preparation and that didn't happen almost maybe some of the regulators were a bit of ahead but I don't think this is what we should get. So by the end of the day there is like smaller part I would say who is really trying to to get ready some of them already applied and there is much bigger part uh of the clients who are now trying to find out what's

going on and they're already asking okay shall I apply for Mik or not but u it's pretty tough to tell them well you have like in Czech Republic you have uh two more months before you should apply but just to prepare the application for you that well two months is not doable right now for us. So I think they are now getting know learning that they are like in two months they'll be in a situation that they haven't applied yet. they have the operations business operations going on and if they continue without the application or let's say like out of the rules that means that uh you can lose the uh the trust of the regulator which is one of the criterians

uh one of the principal um parts of what you what you should get or you should have for for the application. So that's that's how it is. Tech language or product designer language user experience could have been better. Uh it's rather about the kind of infrastructure for education of everyone regulators industry players like really and this is this is not this was not even incentivized somehow towards the private sector. Yeah. It was like okay some of them some someone started somewhere uh but that's not I think that's not what how it should work.

Yeah, we are talking about the European uh regulation actually. But maybe with every new uh piece of legislation, it takes time for things to settle in and for uh everyone in the system get accustomed to. Well, yeah, that's pretty natural. But uh what I'm talking about is that uh if you want to move from zero regulation basically to tough regulation, demanding regulation uh and like you are actually because it's not like that that you're moving in the sector that is already regulated.

No, it's not regulated. So they don't even know what the regulation is. That's how it how it works in the for many many u like business entities. So you just have to put a lot of effort into the the education of what the legislation is. Yeah. It's not just well so this is the difference between the let's say regular situation. Okay. There's something new here. So we just need to set accustomed to it and this type of of change. Um, Andre, since Mika regulates partly, maybe it tackles at least capital markets, we still have um a lot of other directives and

regulations that cover capital markets like Miffy 2. Uh can you comment on how um MIFIT for example uh affects capital markets and uh web3 crypto industry actually? Well, I think at the beginning when the Mika was proposed as Yaki mentioned um um I think now it's already five years ago um the the very idea was to limit the scope of Mika regulation to those uh provisions of financial services that are not regulated somewhere else.

uh just to make sure that there is no overlapping between the existing legislation as you mentioned for instance the MIT so the market and financial instruments directive and regulation and and then the newly coming mika um obviously I mean it's very well said in theory in practice it's always very hard because uh not only well there were changes in terms of how the Mika was negotiated but also MIT is transposed in 27 different me member states in 27 different ways Um but I think uh I would I would rather look at it from the other way around.

For me, Mika uh and we can yeah we can spend hours discussing whether it's perfect or not. I mean it's a Mika is a re reality for mainly for crypto business and for issuance of digital assets in Europe. Um and at the same time I think to be honest it's it's uh one of the most advanced pieces of legislation in term of addressing these new technologies digital assets. We haven't had anything like that before on the European level. There were national legislations, right? I mean those who are active in other countries in France, in Germany, there were local provisions uh on the digital assets, virtual assets, whatever we call it in different countries. So I think one of the one of the additions is that Mika is

harmonizing on a single market level. So on 27 member states and it's actually setting a new bar, new benchmark. And I think what would be very useful uh it would be actually and that's also what I'm all the time suggesting to my colleagues in European commission to look at it existing financial legislation for instance like MIT but it it can be all all others now we have the payment services package opened electronic money um directive that is that is being included into it. So there's number of uh pieces of legislation the market um abuse regulation etc that are that are already existing but have been uh adopted in previous periods when the digital assets

sector was not that heavy as it is right now and I think my ideal vision of it would be let's keep the ma standard as a standard setter and let's align everything else together to it there's nothing much in me that pro actually provides uh some opening for the digital assets issuance in terms of securities etc. We will have now very um either it has been already published or it will be published the new proposal on securitization in general in Europe. Again I think if we can actually bring it on the same level uh with digital assets legislation it would be only good because we can then talk about issuance of securities uh in you know using the DT technology for instance which in the

country where we're currently sitting is impossible by the law. Uh so I think these are things that we should we should focus on more look into implementation of Mika and how we can actually enhance it by aligning the existing legislation to the same uh to the same level and on top of it we also have uh with with one thing that I believe is is uh a good blueprint for uh the next uh way of legislating and that's the DT pilot project. So an experimental legislative environment which invites the businesses but also the supervisors and regulators to come together and propose new business models, new initiatives mainly in the area of securitization and issuing securities uh on on blockchain. And I think this is this is also one of the

areas where uh where the business can can look into and say okay this these are the these are or this can be um ways how the regulatory framework can help the innovation grow without creating too many obstacles in terms of compliance but there are opening new path uh for uh for future projects and I think yeah this this in my view would be the best tasking for the for the remaining of the decade in terms of regulatory activities rather than coming back and let's say revising Mika etc. I think we have much more that we can do in order to make these uh regulatory framework even more functionable than than it is today.

Thank you. And joining given that you were involved in u um drafting u mika and um you are familiar with the goals that uh European Commission wanted to achieve with this with this regulation. Um can you give us maybe some insights how that process looked like and um maybe uh does Mika strikes the right balance between investor protection and uh crypto innovation in Europe?

Ilia that's a very interesting question because really um when we started drafting Mika internally and you're absolutely right the formal procedure is five years but actually we started the first draft after the ICO hype in 2017 because that's when people realized for the first time there's something out there and the commission wanted to support it which is why the first focus was only what I would call utility tokens which is now section two we don't call them utility tokens anymore but it's basically the non-h hardcore financial stuff in a way where there a couple of pretty liberal ideas that are still in there. For example, white paper instead of a prospectus. Actually, I'm working a lot of on Dows now and I think we don't need to regulate Dows. But I'm I'm considering myself uh at the moment

whether it would not be advisable for a DAO to have the uh governance token similar to a white paper on under Mika basically explaining who issues a token, how many, what technology, etc. There's a little bit of core information that that people should know. Then the reversal of the proof. So you send the white paper to the national regulator. You don't wait for approval, but basically you have the passport for 30 countries. I think that's pretty revolutionary. Now uh and Andre is is much better a politician than than I will ever be. We all know that when you want to achieve a compromise is uh you have to be uh hardcore at the beginning.

So uh basically we brought a pretty radical uh view forward that at the beginning was interesting to no one and then of course Libra came and the stable coins and suddenly the whole political area was uh interested in that and then it became difficult because honestly Mika is a hybrid of three things. Mika is the liberal part on the utility tokens. Uh then it's the big part on the stable coins where governments told us very clearly prohibit all of that. It's bad. It's not prohibited but we have rules. And the third thing is simply the stuff that is not in we cannot forget that in a regulation it's always also very important what is not regulated and that's really a lot of stuff does that at the end of the day strike the right balance I think that completely depends

on what your business model is uh I know a lot of businesses that are very happy uh but others for example asset reference tokens or what I would consider normal stable coins for example on gold on commodities real world assets etc it's a disaster in terms of license application So that is because of strict rules that have nothing to do with Mika because that's Basel standards and other things as well which are very difficult and there I need to completely align with with Andre because um there's a lot of stuff that we now have in Mika through the discussion and especially also the approach that existing regulators outside Brussels have taken um that are stricter on crypto than on other stuff and I briefly mentioned the

environmental standards. We don't have that for my products or reverse solicitation or many other things that I could mention holding thresholds unhosted wallet stuff like that but basically there is an attitude from some parts of the system that want to regulate everything in crypto and more strictly than is out there and this we cannot afford. Uh I think we started really mika as the liberal part not next to me but underneath Smith. So between draty and defi there's a mika part that is in between and in that sense for many business models it has not achieved the objective. So that is work in progress fully along the line that Andre says this being said if you do manage to get

a license under Mika it is a massive selling point for your business and it's not only a massive selling point for your business within the European Union but I very often hear as as I mentioned briefly before these talks about these big players in Asia for example companies go there look at our markets and platforms and what we all have there I can tell you in private when you talk to the Asian regulators and there comes a new company that wants to do business in Asia, the first thing they ask is do you have a license in Europe? Because if you have a license in Europe, it means that we can already cut short a lot on the that otherwise we would hear because then you are a serious player. When you don't manage to get a license in Europe, we need to throw a

look at actually what your business model is. And this is a patchwork. The reality is a patchwork. Uh take Bit Panda as as one of the leading European platforms. So they might have seven or eight licenses on different services in seven or eight different European countries. That's the reality. So that's also where of course here now in the Czech Republic, I was in France and and the Netherlands last week, completely different mindsets of the regulators. You have countries where the regulator simply says we don't talk to you. You have others where basically they said don't send us the junior people. We only want to talk to the boss. But it also comes from the other side that sometimes you have companies that go to the regulator and don't know what they talk about and they are not prepared and I think this needs to grow together from

two sides. So it's a massive learning experience. We need to foster that. We have a actually massively successful sandbox at the European level where we're now starting the third cohort with 20 new use cases where we bring actually 50 regulators not individual regulators but regulatory bodies in Europe together with the innovators to really discuss that and I can tell you you can ask the most simple and foolish question in this sandbox without anyone noticing because that's actually where a lot of people stand and this is the kind of dialogue we need to see but you will never have a homogeneous perfect market or product in 27 plus three countries that's not the reality. But that is not anywhere else on this planet either. So let's not criticize more than we deserve. We deserve probably a lot of criticism, but

things in Europe are, I would say, on average better than they are outside of Europe. And uh Radim, from your uh practical experience, um where do you see Mika creating the most friction in in day-to-day business? Is it uh maybe for startups who by definition don't have um money either for their product marketing uh let alone uh compliance or it's uh maybe for other uh other product companies that offer vasp services or maybe stable coins similar well that'll be a different question for like uh uh

what is the fiction right now and what is going to be once uh the market will be let's say operated based on real like Mika application and there will be more or less only the Mika uh regulated companies but right now during the process um yeah I think it's the uh the positions you need to appoint people to yeah hiring new people and let's say this like com this type of compliance approach or thinking of how your company should operate from now on. Yeah, this is the the like the toughest part for them because this is something like uh

if your if your business is growing, if your company is growing uh well that's quite natural uh change. Yeah, because sometimes it's quick obviously. So you need to adapt quickly, but u more or less you have some time and and let's say also you're somehow ready uh to adapt to to the grow changes that it brings. Uh but uh as I said like well that is actually something what would be great if if we had it here if we could use these two years for this adaptation.

So for example, I remember that like in uh October September 2022 uh we actually set up the the project called crypto regulation CZ. Yeah. And we wanted to already help the clients uh to to start preparations for all the uh requirements that uh Mika set out. But it took us like a year, year and a what is this? Yeah. A year and a half until we could really see that the clients are somehow like interested and we really like work hard. Yeah. Okay.

You should start now like uh next year or like two months before uh before the end of the transitional period. So um I mean yeah this this change change of the like actually the company itself what what it brings inside this is the this is the tough part. Yeah, because it needs you to really rethink a lot of things your like change your approach even in like the day-to-day life of your company. That's all I can see. But in practice like after a year or two, we will see what will be the the friction that it brings uh once operated based on Mik and from from my perspective as a

non-EU lawyer. I'm from Serbia. Uh and comments uh from different projects and and colleagues around Europe. Uh I see that uh startups struggle the most because Mika sets um high standards uh which means compliance costs which down the line means that uh it will be more expensive to to comply. So, um do you think that this um might drive those projects out of uh out of you and push them to uh jurisdiction shopping?

Um I don't think so. This is this is going to be the reason for drive this is going to be reason for driving out the the companies uh or or like uh making them to find another jurisdiction. This is actually rather um uh the reason for u decrease of like smaller providers uh because if you are small and you don't have the ambition to grow as much as needed for attracting some investor that could help you with even with this this cost you need to uh suddenly uh uh spend on something new uh well in such a case you will

probably like end up closing your company or trying to sell it to someone. So uh uh this is the consequence of of the cause. However, uh there are definitely the reasons for uh for jurisdiction shopping. So far from from my experience uh it it well it depends for example with the token issuance. Yeah. Um what we are trying to explain to the clients is look okay if you want to focus on the market if you want to actively offer something on uh offer the

token on the European market uh then mika makes sense also in terms of some marketing aspect. Yeah. Because we can say okay I'm fully compliant with the new law here. there's not so many token uh projects approved or white papers approved uh yet. So you could be one of the first and u well this could be part of your branding for this project. Uh but if your if your idea is well okay maybe that I'll have some European customers but I will rather focus on the more worldwide community then uh it's can be a big limitation for you. Yeah,

because then you already using another even the the marketing strategy you're going to use will be different. Yeah. So this is for example the the the re the uh example of it but that's for the token is insurance for u for providers. I don't know yet. I don't know yet because it's much harder to uh decide I'm not going to focus on the European market here anymore. I'm going to focus somewhere else because uh if you have a clients here, yeah, you just don't easily find the clients in like one month somewhere else to extend what we have right now. Yeah. So, um I think we will see we will see this the reality in practice the this of this change in two

years maybe in two years at the same place. I think I'll tell a lot more. We can discuss it. Again, just for the for the audience who doesn't know, jurisdiction shopping is basically you sitting down and looking which jurisdiction offer offers the best terms either for tokens, taxes, incorporation, so on and so forth. So just looking around uh what's the best option for you? Um and maybe uh on the policy level expounding on on uh what uh Radim explained um what do you think uh are there uh jurisdictions like uh United Arab Emirates uh Singapore or um Switzerland who might exploit this um

um not to say burden but high standards and compliance costs that that MA make sets in order to attract European startups. Yeah, I think we'll we will see this uh in in practice. But maybe if if I can just come back what what has been said before I completely forgot it. Um there is there is exactly one thing in Mika in terms of um not being able by legal regimes to distinguish between significant CASPs and let's say regular CASPs we are not making any difference.

So uh startup or a very small company, a very limited provider of services or global company entering European market coming from US or China or Asia, they all have the same amount of rules to comply with which is obviously not fair. And um myself I was I was fighting for that. I have to admit I lost that battle politically because obviously even from the regulatory point of view in in member states the regulators prefer to regulate and supervise lower amount of biggest bigger bigger entities than you know but this is this should not be a reason but I mean we have in Mika differentiation uh different regimes for

different uh size of tokens you can issue tokens which will be completely without Mika uh compliance rules if it doesn't reach necessity in terms of thresholds, amounts etc. But we don't do we don't do this distinction for CASPs and I think it's a mistake uh because we uh should have had these let's say light mika regime for startups and small companies with low significant potential impact on financial and monetary stability on business market etc. and then full full regime for for global or those companies that they are operating in global markets. we don't have that and possibly I hope that we can remedy that at some point. Uh I think it would it would help a lot to

solve this solution because because what we created right now with Mika it's actually a condition to enter the market. What we have what we have what we what I believe we should have done is make ma one of the stage of growing your business. Mhm. You see, so start your start start your business and then if you believe that it makes sense for you to grow with m full mikaroo compliance then do it and then you can market it very well and then you can grow the company better you can even access finance better uh etc. So I think this is this is the distinction that we didn't understand properly or the majority of my colleagues in the parliament and u I hope that we can do something about it. In terms of

jurisdictions I mean if you have a if you have a startup even if you have startup in in in crypto uh and you mentioned it earlier yourself the Mika compliant rules will be one of the parameters that you will look at. Um you can have very friendly MA regulators in Europe. you can opt and establish your company in there and then you realize that it's very hard in terms of tax rules, it's very hard in terms of AML rules, it's very hard in terms of uh job restrictions for instance and then you realize that I mean you maybe saved some money and effort on Mika but you're struggling on something else. So to be honest I think it's a mix for this for

this decision- making for companies to uh start their business in a different market. In my view it will be mix of these considerations. Mika will be definitely part of it spec specifically for crypto oriented markets and and companies. Sure. But uh I think we should if we want to make sure that the startups are not leaving Europe in general, we should we should not only uh look into implementation of makeup but we should look at the more general business environment in Europe. And to be honest u if you look at for instance in UAE they offer many more advantages that that just you know less strict uh crypto assets regime that the company would would would go for. So I think

it's much more complex question in this regard and in my view it would be hard assess only on the basis of how the Mika is is is implemented but it nevertheless we should focus on the fact how we can make sure that the startups grow and stay and scale up in Europe before uh before going elsewhere and even if if they are started in UAE or Singapore or somewhere what can we do to bring them here in the next stage of their life. Yeah, Kim, your take. Actually, this last remark Andre is very timely as you know because we adopted today the startup and scaleup communication which is uh on these things. But I think there are indeed a couple of things coming together. I mean in my opinion we should distinguish between what is Mika or

cryptospecific and what is not. So startups in Europe have a number of problems. uh not the lack of innovation but the scaling up the financing of the last uh rounds uh a number of regulatory issues these are general conditions it doesn't make the situation better but it is first of all a thing that is outside mika and crypto then we have the skills part we have the mindset we have a lot of other things so if you then boil it down to what is actually crypto regulation in my opinion you observe that you could while you can take these examples like uh Vera now in Dubai or what whatever happens in other places of

the world that this is a sort of game in sequences. So we bring out Mika others learn they do something they make mistakes we learn again and that's how the game basically goes. So um it's not a static optimum but it is a thing where ideally people globally learn from the mistakes that others are doing and sometimes that change very quickly also in the UK I mean they had quite a big ambition of being uh innovative I would guess and what I see the last six months is basically all of that crumbling pretty much down one interesting fact that you see in the US in my opinion and let's not talk about the US is um that um when you look what the Trump administration has done in terms of regulation and improvement of rules,

it's basically zero. What they have done is they helped certain people change the mindset. And that's an interesting point because I think we talk too much although it is merited about details in written regulation and we don't talk enough about general mindset that people have and there I see two issues. The one issue is if if I was a company and I would be in a position to talk to my regulator, I would massively focus on the human factor because that's the one thing that I have learned in my professional life. You need to get the right people in the room and um ask the right questions and do the right stuff.

And I know a lot of regulators that don't have much experience with the crypto stuff, but the moment that you engage with them openly and you appear trustworthy that you get a much better deal than when you don't do that. and I've seen it too many times before. The second point is in indeed there is one aspect which is specific to crypto and that is a matter of concern and I think uh you said it perfectly. There is a tendency in the legacy system to uh prefer to continue what they've always done in the past with their slow regulation for banking and capital markets that they have a few number of players that they know well and they take ages to adopt the rules and improve them a little bit and that you don't

have in crypto. So certain parts of crypto are being dried out by I would say an obsolete uh mentality that you have in a lot of regulatory systems at at national level and that is not so much from a systemic perspective important for the crypto market itself that is in Mika but that is very important for the innovation that we get for example in distributed systems whether we look at DeFi whether we look at the whole DA uh DAO space etc. privacy coins, all of that is what's going on which I'm immensely enthusiastic about personally because the moment that you actually don't talk about crypto because it's crypto but you

talk about crypto because you see it as a danger because actually there are privacy enhancing technologies but you would like to have everything under your control or whether you see everything from an AML perspective whereas AML is just a small part in the whole thing and shouldn't always take the priority above all things then you are really causing a problem and this is the fundamental problem that I actually see in Europe. It's not that we have indeed certain things in Mika that can be done better but that we have still too many people out there that don't feel the heat. They don't feel the pressure from others outside the system because they think they can go on endlessly like they've always done before and that's the wrong attitude. So that that's a mindset problem which will be solved by nature.

It will be solved by demographics because all these old people at a certain moment will be dead. And that is what we see throughout human history. I've I've done a lot of research of that in my past as as a scientist basically also for other things. You do not change systems by convincing people. You change uh systems by having these old fall in their coffin and the young generation takes over. And that is what we see in crypto. But it takes a couple of years more. And uh since we are almost uh done with our our panel um can you uh just sum up and end on a positive note u if possible objective note maybe um do you think that uh Europe will be able to catch up and stay on top of the this uh

tech race in the future in coming future and you can start and well I hope so um uh no I think the the key the key would be actually in my view uh I think Yim put it right in terms of the change of mindset um we we see more and more and I think uh it it is also let's say sector specific but u in my view it's more innovation specific we should slightly change the way we do regul population in in Europe. Maybe it's a it's not slight change. Maybe it's a fundamental. But we should stop see it the the oldfashioned way. So that

we have on one side the public side that is you know the patternalistic and and on the other side the business that is seen by the public side uh as by definition uh an actor that is trying to bypass the rules. And I think the the future of of uh this is in a very close cooperation specifically on on innovation and on areas such as digital assets where the business trends and innovation happen so fast that the public side is actually not able to react properly. It's about creating these experimental environments such as the pilot regimes and sandboxes etc to put together and communicate and talk.

And I think by the way also in what I understood what's happening in the US right now there's much more uh emphasis put uh into the better comm communication between the regulatory and supervisory authorities and the business itself to find you know how we how we can strike the right balance because just maybe to sum it up you might you asked about you know did we strike the right balance with Mika I hope so but again the Mika was mainly created by the legislators ers around the table with just you know consultation of the of the industry. I really hope that you know in next stages we would be able to already design and draft and adopt the legislation together with the with the

industry that will in in the end will be compliant because only only this way we can guarantee that the regulation will be sort of open to uh potential future uh future innovation and I see already signs of it already happening right now. I think this should be more our new practice and if we are able to understand that and do it then I think Europe Europe can actually still you know have a lot of potential to build uh on it. Obviously not everything is perfect but at the same time I think the conditions are quite well established in in Europe. I think we should we should build on it but we should not overthink stuff. We should actually, you know, make it simple and try to use what is what is happening

also ac around us to to take the best out of it and make sure that, you know, the things that we believe are important together what we expect to be important in in future that are that are merged together. And in this regard, I think many young people also um uh believe this this should be the way forward and I and I hope they would have a say in what we do in in next decades to come. Anything else to add? Extremely briefly looking at the time. I mean just one thing to add. Um I think uh it's important to have the reality check and you mentioned that rightly. I mean what we're now getting in the next wave of of innovation um is that every child can talk to a sort of

uh system where behind that is an AI that writes a smart contract on what has just been discussed uh while the conversation is going on. So um if you see not we talking now blockchain and crypto and stuff but if you see the recombination of technology then actually the numbers and the basics matter and the basics there are we have 450 million people in Europe that are on average meaningfully educated that take an interest in this stuff. This is a massive asset to to look into the future and this is where the pressure and the innovation will come from. So um that is something that that in a in a way is a natural wave that makes me very positive but um it's still a difficult life if

you know that the future will be bright but you have to get there. So um we still have to get there. Radim will we make it? Uh let's hope and pray that uh the future is bright and um if we think of regulation in general as something that could rather incentivize the quality of the environment and let's say some uh some business uh field some industry in general I think we will by the end of the day see like if we were successful uh or not because we were uh the what what we've seen in Europe so far in European countries the level of development and

uh state of the industry so far. So we should see another progress in the future. If we see that more and more businesses are moving from here or uh actually the new trends are happening somewhere else then we are not successful. Yeah. So definitely there will be metric finally that they do say if it helped the industry or not. Uh thanks a lot thanks for your insights and um uh predictions. Um thank you for attending this panel and uh see you tomorrow.

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