MiCA law approved: EU regulates the crypto sector
It's been a long road, but the big word is out: the Markets in Crypto Assets Regulation - MiCA - has been approved.
It's been a long road, but the big word is out: the Markets in Crypto Assets Regulation - MiCA - has been adopted. Yesterday, Thursday, April 20, the European Parliament gave the green light. This clears the way for crypto regulation in Europe. The MiCA regulation applies to all EU member states and provides the sector with a uniform legal framework. With MiCA, the EU is the first major economic zone to regulate Bitcoin and other cryptocurrencies.
From utility tokens to stablecoins
The new rules target several subsectors of the crypto market. From utility tokens to stablecoins to storing cryptocurrencies themselves. In the future, crypto service providers will need a mandatory license to operate across the EU. The final regulator depends on the number of users. Crypto services with more than 15 million users will be supervised by ESMA or the EBA, everything below that will be taken over by national authorities. Additionally, the MiCA regulation requires crypto projects to publish a whitepaper with detailed information about the business operations and the technical design of the tokens.
The new crypto rules, however, won’t take effect until the text appears in the official Publications Office of the European Union. Experts expect this to happen in June 2023. From then, the activation process will take another 12 to 18 months before the regulation is fully in force. At the time of writing, NFTs, the DeFi sector, lending, and staking are excluded from MiCA. Behind the scenes, lawmakers and experts are already working on an upgrade, essentially a “MiCA 2.0.” Parallel to MiCA, the anti-money-laundering regulation “Transfer of Funds” (TFR) has also been approved. From now on, providers must report and verify all transactions above a 1,000 euro threshold.
MiCA milestone
All in all, politicians and industry representatives are happy with the end result. For Benedikt Faupel, head of Blockchain at Bitkom, Europe has set a global standard here. In a press release, he described MiCA as a "milestone" for the industry.
Also Ilya Volkov, CEO and co-founder of "YouHodler", sees the regulation as positive. MiCA not only brings clarity for companies and customers, but also supports jobs and economic growth. "The EU can also benefit from the regulatory crisis in the US," Volkov adds. U.S. authorities are currently taking action against several crypto firms. First of all, the U.S. Securities and Exchange Commission (SEC) is seeing numerous cases of illegal securities trading in the sector. Critics, however, accuse the authority of overstepping its powers and are pushing for their own regulation of digital assets.
