The European Union (EU) has adopted the full legal text of MiCA, a legislative proposal on the regulation of cryptocurrencies.
EU agrees on landmark cryptocurrency text
The bill, signed on Wednesday by EU Council members, was last in draft form in June. In general terms, MiCA sets licensing requirements for exchanges and wallet providers in the EU’s 27 member states, including the need to check user identity. In addition, the legislation imposes a capital requirement for the above-mentioned service providers. The bill is expected to prevent the depegging incidents seen with the collapse of the Terra ecosystem. It will also be a solution to other major liquidity problems in the market.
Although the MICA text is ratified, it will take some time to come into effect. The bill is currently expected to enter into force in 2024. Before that, the EU will place the bill in the official gazette. The EU has also placed Bitcoin and cryptocurrencies at the forefront of its agenda for the IMF and World Bank annual meeting.
When will crypto laws come into effect?
As we mentioned above, the diplomats’ agreement is not the final step for the MiCA law. The text will also be legally approved by members of the European Parliament. The implementation of MiCA is an important milestone in crypto regulations. Many sovereign countries are preparing to apply to the EU to draft their own cryptocurrency regulatory rules. In addition, the EU is one of the largest financial centers in the world. Therefore, a crypto regulatory framework across the continent would certainly inspire others to look in the same direction.
What are MiCA’s regulatory goals for the cryptocurrency market?
According to the MiCA text, the bill has 4 broad purposes in cryptocurrency regulation:
- To provide legal certainty for cryptocurrencies that are not currently covered by current EU financial services legislation, which is clearly needed.
- Establishing uniform rules for crypto-asset service providers and issuers at EU level
- Replacing existing national frameworks applied to cryptoassets that are not covered by current EU financial services legislation
- Establishing special rules for so-called ‘stablecoins’, including when e-money. (Terra)
cryptocoin.comAs you follow, the bill also plans to include NFTs under the law.
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