Dates Announced For The Expected Cryptocurrency Law!

Proponents of the European Union’s soon-to-be-enacted Cryptocurrency Asset Markets (MiCA) regulation argue that this regulation will have an impact beyond its limited scope. They also say that the race to seize the “crypto crown” among institutions began before the final vote on the law. Here are the details…

Latest developments for cryptocurrency law: in effect in July

After several years of consultation and negotiation by lawmakers, the final text of the MiCA will be voted on by the European Parliament later this month. The law will likely go into effect in July, and key provisions will take effect 12 to 18 months later. On paper, MiCA sets out to regulate companies that issue crypto assets and ensure that investor information is honest. Connected service providers such as crypto custodians, advisors or exchanges will have to apply to one of 27 national authorities to obtain a license to operate in the EU.

Beyond its limited scope, it is considered to be sorely needed after a year of market turmoil. It is pointed out that the sector will become more secure. Both industry and government talk about the importance of MiCA. Rok Žvelc, a European Commission employee who forms part of MiCA’s draft team, said in a speech at an event in Brussels on March 30, “A crypto-asset service provider, a CASP, a brand in the European Union … will be the industry’s kind of stamp of approval. will be. Investors will know that when they apply to CASPS, they will have all the protections MiCA provides.”

What kind of path will be followed for stablecoins?

On the other hand, directly affected companies such as stablecoin operators are also optimistic. “MiCA is an incredibly positive stop and a global regulatory environment for crypto assets,” said Teana Baker-Taylor, vice president of policy and regulatory strategy at Circle, who hopes to use the new regulation as a springboard for the euro-based stablecoin Euro Coin (EUROC). .

cryptocoin.com As we reported, EU policy makers, alarmed first by Facebook’s Libra initiative and then by the dramatic collapse of TerraUSD, said that cryptocurrencies tied to other assets such as fiat should hold sufficient reserves and their transaction volumes should be limited if they are tied to a foreign currency. Despite these restrictions, Baker-Taylor said the new law is welcome. Baker-Taylor used the following statements:

Just having clarity on what the rules are in the process is incredibly beneficial for the industry and these market participants. Likewise, I think it’s incredibly beneficial for Europe’s competitiveness.

What does MiCA cover?

Much of the recent discussion has focused on what MiCA does not cover. Because crypto lending and staking platforms, decentralized finance and NFTs, these will all be addressed with further regulation. MiCA is not going far enough to deal with big players like Binance, as ECB’s Elizabeth McCaul warned in a recent blog. Still, it represents an important step: for the first time, a large jurisdiction, covering nearly 450 million people, is implementing a stable framework targeting the industry. The benefits can be widely felt.

SettleMint, a Belgian company that offers Blockchain platforms as a service to other businesses, is not directly affected by MiCA’s rules. But the company’s Chairman of the Board, Matthew Van Niekerk, said the law could discourage potential customers like banks to try innovations like tokenized bonds. “What is holding them back is regulatory uncertainty, both in the areas covered by MiCA and on related issues such as personal data protection,” Niekerk said, adding that Europe is “100 percent moving in the right direction” towards this greater clarity. MiCA could also be a tool for countries that want to impose extra measures, such as recently proposed restrictions on social media influencers, France, which will ban promotion for any crypto company without a license.

The race continues in the cryptocurrency space

With so much at stake, EU member states are in a race to see which can become the crypto hub of choice. In principle, MiCA sets a consistent level of rules that must be followed throughout the union. In practice, national authorities may differ in how they implement this. This is a race that not everyone is trying to win. Dutch regulators have already said they are not ready to hold back some factors to gain business. Van Niekerk also said there can be multiple winners as different countries play to their strengths: Countries like Belgium may specialize in business-to-business blockchain services, instead of crypto for the individual market, for example.

But there seems to be a clear leader for now, according to experts: France, which was recently chosen by Circle as its home in Europe and whose current law, known as PSAN, has already registered 66 crypto companies, including Binance, eToro, and Societe Generale. While Baker-Taylor isn’t the only EU country to envision MiCA, he thinks France strikes the right balance between attracting investment, protecting consumers and stabilizing markets. The similarities of PSAN and MiCA mean that there will be less ups and downs for companies and regulators as they move from one regime to another.

Countries prepare for MiCA

In other parts of Europe, the industry is wondering what will happen to countries like Portugal, a country that has attracted a significant crypto community, thanks in part to a sympathetic tax regime. “We urged authorities to anticipate the effects of MiCA,” said Hugo Volz Oliveira, secretary and founding member of industry group Instituto New Economy. Oliveira’s concern is with regulators, who in principle must decide on administrative procedures for companies to convert existing registrations to MiCA licenses.

Spokespersons for both the Portuguese securities commission and central bank said they are preparing for the MiCA, but more details will come only after the rules become official. Still, Oliveira worries that the longer crypto companies stay in the dark, the more damage they and the wider economy will suffer. “Portugal is very likely to lose the race to become a crypto hub, which means fewer applications for regulators to process,” Oliveira said. “This is good for bureaucrats but bad for the country,” he said.

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