According to Norges Bank's annual report, international regulation may be too slow and may not represent Norway's interests.
The Norwegian central bank's "Financial Infrastructure Report" has been made public. It committed a significant piece of the report to crypto resources and whether or not Norway ought to rely upon worldwide administrative guides to control its market.
In a few years, the Markets in Crypto-Assets (MiCA) regulation of the European Union "will probably also apply to Norway." However, Norges Bank stated that "the Ministry of Finance will assess EEA relevance and implementation in Norway." Norway is not a member of the EU but is a member of the European Economic Area.
According to Norges Bank, MiCA may not meet all crypto regulatory requirements:
“Such targeted regulation often fails to capture risk related to the newest technological developments and activities and can therefore be insufficiently resilient.”
As an illustration of this issue in MiCA, the bank cited flaws in the regulation of decentralized finance.
Related: The condition of crypto in Northern Europe: Scandinavia's hostility and the Baltics' vitality are psychologically influenced by regulation's quality.
It stated that participants must perceive a sufficiently high likelihood of being detected in order to have an ex-ante disciplinary effect. That pertains to other authorities, but it also stated that the bank "would contribute to such assessments."
Further advancement of MiCA could be driven by public interests that Norway doesn't share, the paper said. As a consequence of this, "Norwegian authorities should evaluate whether to proceed more quickly rather than wait for international regulatory solutions."
According to the bank, "private entities" may have undue influence over Norwegian taxation regulation without such a step.
Due to their relative newness, the lack of prior experience with crypto assets can impede sound regulation. The bank went on to say that one of the unanswered questions regarding cryptocurrency is the extent to which the laws that are currently in place are capable of effectively regulating it.
Additionally, the bank stated that it would publish its findings regarding central bank digital currency later this year.
(DEREK ANDERSEN, Cointelegraph, 2023)