MiCA was recently enacted and published in the official journal of the EU. Thus, the countdown has begun for the implementation of cryptocurrency legislation in 27 member states. This will be the first of its kind.
MiCA will turn Europe into a cryptocurrency hub
The European Union enacted its Crypto Asset Markets (MiCA) regulations on May 31. Thus, it paved the way for the regulatory guidance on cryptoassets and service providers to come into effect. This is a turning point for crypto. The EU’s regulatory package, first drafted in 2020, will govern the delivery and scope of services related to the cryptocurrency market.
The European Parliament adopted the MiCA regulations on 20 April. The bill was then sent to the Council of Europe for approval. On 31 May, European Parliament President Roberta Metsola and Swedish Minister of Rural Affairs Peter Kullgren signed the framework into law. Sweden currently holds the rotating presidency of the Council of the EU. MiCA was published in the Official Journal of the European Union (OJEU) on June 9, triggering the countdown for the law to come into effect. This means that crypto businesses set timelines for implementing and complying with MiCA’s requirements. The stablecoin rules will be effective from 30 June 2024. Also, the rules for exchanges will come into effect on December 30, 2024.
What does the new law bring for crypto?
MiCA defines a crypto asset as “a digital representation of value or rights that can be transferred and stored electronically using distributed ledger technology or similar technology.” The legislation also clarifies what qualifies as “cryptocurrency”. It also provides guidance on what “tokens” certain digital assets.
In addition, MiCA sets standards for crypto-asset service providers (CASPs) and crypto-asset issuers. Issuers of crypto-assets are required to comply with standards governing disclosure and disclosure, and provide complete and transparent information about the crypto-assets they issue. CASPs must also adopt security measures and comply with Anti-Money Laundering regulations.
MiCA legislation establishes CASPs as separate legal entities. It is possible for service providers to be licensed and do business in any of the 27 EU member states. Service providers need to resist market manipulation and abuse. They will also be under the scrutiny of regulators such as the European Banking Authority.
Stablecoin service providers will be required to provide a white paper with key details about the product and key players involved in the business. The whitepaper should also include a summary of the terms of the IPO, the type of blockchain verification mechanism it will use, the rights associated with the relevant cryptoassets, the key risks for investors, and a summary to help potential buyers make an educated decision about their investment.
Cryptocurrency area outside the scope of MiCA
MiCA will not manage digital assets that qualify as transferable securities and behave like stocks or their equivalents. EU legislation does not cover Non Fungible Tokens (NFTs) or crypto assets that are currently recognized as financial instruments under current law. MiCA also does not regulate digital assets issued by the central bank, whether it is the digital currency of the European Central Bank, digital assets of national central banks, or services linked to cryptoassets provided by these institutions.
David Schwed, president of blockchain cybersecurity firm Halborn, says MiCA is a very important development. He also notes that it has demonstrated that a comprehensive framework can be created to provide clear direction to specific market segments. He adds that while MiCA excludes certain aspects of crypto, such as NFTs and decentralized finance, regulations are an important step forward. In this context, Schwed comments:
This regulation is an important step forward for the crypto community. It offers a uniform framework for all EU member states. Thus, it sets a precedent that I believe and hope the rest of the world will take note of and consider embracing.
Europe assumes crypto leadership, backlash to MiCA
Cryptokoin.com’As you can follow from MiCA regulations, they were enacted nearly two years after they were first proposed. This has brought some regulatory clarity to crypto businesses in Europe. While not perfect, there are strict rules that crypto companies must follow and access the market. According to experts, it is possible for Europe to become a more dominant crypto hotspot, unlike the US, which has no set legislation and with increased enforcement actions against many crypto exchanges. Binance CEO Changpeng Zhao tweeted about MiCA’s latest promotion. Zhao said there are exciting business opportunities for compliant crypto service providers in Europe.
Zhao’s comments follow the US SEC’s recent lawsuit against Binance and its CEO. Kadan Stadelmann, chief technology officer at open-source blockchain technology firm Kodomo, says that while MiCA’s effectiveness is debatable, it is undeniable that MiCA has laid the groundwork for worldwide crypto regulation. Based on this, Stadelmann makes the following statement:
Other countries will likely choose a ‘wait and see’ approach before making their own adjustments. Still, the impact of MiCA is clear. Most countries will feel pressured to adopt some form of regulation in order not to fall behind in an increasingly important industry.
Alex Shevchenko, CEO of Tier-2 platform Aurora Labs, says the implementation of MiCA “could potentially influence policy makers and regulators in the US to consider similar approaches, striking a balance between consumer protection and market development. As a result, it assesses that this will lead to increased cooperation and harmonization efforts between jurisdictions. Indeed, members of the US House of Representatives Financial Services Committee are currently working on a draft bill that aims to create clearer laws for certain types of cryptocurrencies and bring stablecoins under the regulatory authority of the Federal Reserve.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.