The EU has recently published its draft MiCA (Markets in Crypto Assets) Regulatory Proposals, that will cover markets, assets and service providers and will be applicable to all EU member states.
How might this impact on UMA and what steps should UMA take in response to these proposals?
No impact. Can say this with a degree of certainty. UMA is a tools provider for projects that want to create their own synths. Even in the case of stable coins from OPEN DAO which are synths built using UMA there is no impact. Permissionless synths like DAI, sUSD have no issuer unlike Tether USDC BUSD etc. You are in the clear.
But if it impacts on the product developers who work with us, that will have a knock on effect on UMA.
It does not impact product developers either. The synths are based on smart contracts that are unstoppable and require no active participant. The DVM even is only restricted to ministerial duties. Ref: SEC guidance on digital securities from a couple years back. They will not be classed as securities or the typical issuer reliant stable coins even. This is all in the clear from both UMA and product developer side.
I think its hard to draw direct comparisons with the SEC. The SEC tends to move fairly quickly and has different priorities to the EU. I suspect decentralisation of all things is the key to avoiding the need to be compliant with regulatory bodies.
To some extent, I do recognise the need. The level of scams that are in the wild is phenomenal, and its kindof ironic that things that look the most “business-like”…in a 1970s investment advert way, are the most scammy.
Actually this is not a SEC vs other regulatory bodies in the world. While nuance is different across jurisdictions, the underlying principles are generally the same (atleast in Western jurisdictions).
The SEC actually has a fairly consistent approach and has been putting out well thought out guidance on these matters. It just so happens that the crypto community has not been paying the required attention to detail.
Regardless I will restate here that the above explanation on UMA synths will stand across jurisdictions. UMA tokens by themselves are a governance token and hence have a potential to be seen as a security (if their performance is largely dependent on a core team).
So from that perspective decentralization is important.
However it is also important to not mistake decentralization to simply having more community discussions or a wider user base. There is more to this matter but it will lead to a digression from the point at hand, so I will close here.