For years, one of the biggest challenges facing cryptocurrency adoption was regulation. Trying to maintain anonymity while detaining those responsible for misuse was a daunting task. However, the EU has now passed legislation that not only tracks cryptocurrency transfers, but also creates common rules for the supervision of crypto assets, consumer protection and environmental protection. This is called the Crypto Assets Legislation, or MiCA’s Markets for short.
mica Covers crypto assets not regulated by existing financial services laws. Key provisions for the issuance and trading of crypto assets (including asset reference tokens and e-money tokens) cover transparency, disclosure, authorization, and supervision of transactions. The bill passed with 517 votes in favor, 38 against and 18 abstentions.
It should also be noted that this means consumers have a better understanding of the risks, costs and fees associated with cryptocurrencies. If another cryptocurrency disaster such as the FTX crash or the Terra Luna bankruptcy hits again, consumers will be better informed and protected before spending money on digital assets.
This feeling was supported by Ed Stiltthe founder of an accounting firm ESDG Accountinghe said:
“Crypto as an investment class has recently suffered a decline in value, particularly due to scandals such as FTX, so this EU law is most welcome in increasing the competitiveness of crypto as an investable asset. This is necessary for any investment class that is more mature and attracts investors from a wider public.”
EU Crypto Milestone
This law is a milestone for European regulators. Law and order will be introduced where cryptocurrencies were previously called the Wild West. Speaking of the successful approval of MiCA, Alisa dicapriochief economist at a blockchain company R3 “Smart regulation of cryptocurrencies like MiCA is critical in providing the necessary guidelines on how the distributed ledger technology underlying these assets will be applied.
“This will serve as a vital platform for future innovations as the global competition between technology and financial services intensifies. This is underscored by the recent launch of the DLT pilot scheme.
“Regulation and legal certainty provide the core foundations for any emerging technology to be successfully applied. It will be an attractive destination for more companies to set up and invest in. It would be a surprise if other jurisdictions like the UK and US are not quick to follow suit and further their efforts on crypto regulation. To accelerate”
Nikolai DenisenkoCo-founder and CTO Bright App, Swiss Neo-Digital Bank says: This demonstrates the European Union’s progressive stance on embracing digital assets and fostering innovation within the fintech sector. As a neobank start-up, we applaud MiCA’s potential to streamline operations and improve consumer protection in the crypto market.
“The regulatory clarity provided by MiCA will help increase investor confidence and accelerate the growth of the crypto ecosystem. pave the way for a brighter future.”
travel rules
In June 2022, the EU Parliament agreed that cryptocurrency transfers should always be tracked, like any other financial operation, by blocking suspicious transactions. Following legislative approval, the so-called “travel rule” already used in traditional finance will cover the transfer of crypto assets. Information about the source of the asset and its beneficiaries “travels” with the transaction and must be stored on both sides of the transfer.
Mark FosterEU Policy Analyst Crypto Council for Innovation “What is really valuable is the legal certainty that MiCA provides to the crypto industry. Stablecoins and exchanges have clear rules. It covers operations such as separations, capital requirements.
“Transparency at the international level will make a big difference. It’s also worth noting that their “wait and see” approach to DeFi and NFTs represents a thoughtful pause to analyze and learn more about what these innovations enable.
“With the TFR, the EU is implementing internationally agreed travel rules, bringing crypto to its regulatory boundaries when it comes to AML provisions. is important.
Comparing Crypto Regulation Developments Across Ponds
The gray area of cryptocurrency regulation has long remained due to the inability to define cryptocurrencies. Is it a commodity or a security? You’ll get very different answers depending on who you ask.For example, the previous SEC chairman Jay Clayton both said Bitcoin and Ethereum are not securities.
However, the current SEC chairman, Gary Genslerexplained that, with the exception of Bitcoin, cryptocurrencies are actually securities. said: “Virtual financial assets have important attributes of security.”
There is confusion in virtual currency regulation in North America, dominate judge Analisa Torres SEC v. Southern District Court of New York Ripple Inc. The case advances how cryptocurrencies are managed across the United States.
knock-on effect
Sue FriedmanSenior Director, Global Policy, Ripple, Crypto Payment Protocol Told Fintech Times How she believed it would impact the crypto sector. While we will have to wait until the regulation is fully adopted, this landmark decision is meant to provide clarity to those already on board, and those planning to invest in the European crypto industry. is an important step in
“This builds on earlier European moves in this area and underscores the need for continued momentum towards global regulatory clarity.
“In the long term, MiCA should ensure a thriving crypto ecosystem that supports innovation and growth while building confidence in the utility of the technology. , and the announcement helps continue the momentum that has seen global crypto companies feverishly building their businesses and innovating across the region.
“We look forward to seeing how MiCA provides a blueprint for other jurisdictions to build their own regulatory frameworks.”
Francis Bignell