EU Council unanimously approves regulation
2 min readThe European Union (EU) cleared another hurdle in implementing the MiCA regulation. The European Council has the groundbreaking legal framework accepted unanimously. In any case, it was not to be expected that the 27 finance ministers of all EU member states would oppose the legislation that had already been passed in the EU Parliament. A milestone: The formal adoption of the regulation today, May 16, is the final step in the legislative process.
This makes Europe the first major economic zone to have its own crypto regulation. This was also urgently needed, as the finance minister of Sweden, Elisabeth Svantesson, said in one opinion explained:
Recent events have confirmed the urgent need to introduce rules that better protect European investors and prevent the abuse of the crypto industry for money laundering and terrorist financing purposes.
MiCA regulates crypto service providers
The ordinance brings drastic changes primarily for service providers, who will have to comply with a whole series of new rules from 2025. In the future, crypto providers (so-called Virtual Asset Service Providers, VASP for short) will need a license if they want to operate in the EU. However, the permit then applies to the entire economic zone.
Furthermore, the MiCA regulation obliges crypto projects to publish a “white paper” with detailed information on the business operations and the design of the respective coins or tokens. Above all, these measures bring the EU citizens one thing: consumer protection.
What’s next for MiCA?
However, the regulation does not cover all fields by a long shot. So far, the crypto regulations have excluded staking, lending, NFTs and, last but not least, the area of decentralized finance (DeFi). The topics are to be recorded in a follow-up regulation. In the current MiCA version, Parliament instructed the Commission to “monitor developments on the NFT market”. It is quite possible that the EU will deal with the area around Bored Apes, Ordinals and Co. next.
Europe overtakes the USA
While European crypto companies can now follow clear rules, the US is falling far behind. Because: The industry overseas is currently in a difficult position. In the past few months, the regulatory authorities have tightened their tone towards the industry. At the forefront: the US Securities and Exchange Commission. The agency launched a series of actions against various crypto firms in the United States. The accusation is always the same: trading in unregistered securities.
Rather than crafting a clear regulatory framework, the SEC prefers to rely on existing rules. US-based crypto companies are getting fed up with this and are looking to go abroad. Among other things to Europe.
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