MiCA has been passed: EU regulates the crypto sector
2 min readIt took a long time, now the mammoth project is finally over: the Markets in Crypto Assets Regulation – MiCA – has been passed. The European Parliament gave the green light to a corresponding draft today, Thursday, April 20. This clears the way for crypto regulation in Europe. The regulation applies to all EU member states and provides the industry with a uniform legal framework.
The new set of rules addresses various sub-areas of the crypto market. From utility tokens, to stablecoins, to the custody of Bitcoin and Co. In the future, crypto service providers will need a license and, in return, can operate throughout the EU. Who ultimately oversees the providers depends on the number of users. Crypto services with more than 15 million users are monitored by the ESMA or the EBA, with the national authorities taking care of everything below that.
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.
However, the new crypto rules will not come into effect until the text appears in the Official Journal of the European Union. Experts expect this to happen in June 2023. From then on, the activation process will take between twelve and 18 months before the regulation fully applies. So far, NFTs, the DeFi sector as well as staking and lending have been excluded from the MiCA. In the background, however, the legislators and experts are already working on an upgrade, a “MiCA 2.0” so to speak.
Parallel to the crypto regulation, the “Transfer of Fund” (TFR) money laundering regulation also passed the vote. In the future, providers will have to report all transactions and verify them above a threshold of 1,000 euros.
MiCA a “Milestone”
All in all, politicians and industry representatives are satisfied with the end result. For Benedikt Faupel, Head of Blockchain at Bitkom, Europe has set a global standard here. In a press release, the digital association described the MiCA as a “milestone” for the industry.
Ilya Volkov, CEO and co-founder of the crypto platform YouHodler, also sees the regulation as positive. MiCA not only creates clarity for companies and customers, but also promotes jobs and economic growth. “The EU can also benefit from the regulatory crisis in the US,” Volkov continues. Authorities in the United States are currently taking action against various crypto companies. Above all, the US Securities and Exchange Commission sees numerous cases of illegal securities trading in the sector. Critics, on the other hand, accuse the authority of exceeding its powers and are in favor of its own regulation for digital assets.
