The European Union has formally enacted the Markets in Crypto Assets (MiCA) regulation, a significant milestone in the region’s journey towards establishing tailored rules for the cryptocurrency sector. This development positions the EU as a pioneer in implementing comprehensive regulations for this industry on a global scale.
On Wednesday, the European Parliament President, Roberta Metsola, and the Swedish Rural Affairs Minister, Peter Kullgren, endorsed the legislation alongside a distinct anti-money laundering law. The latter mandates that crypto service providers verify the identities of their customers during fund transfers.
The Swedish government, currently holding the EU presidency and leading legislative discussions, disseminated this news via Twitter. A parliament spokesperson has confirmed that the regulations encompass MiCA, the transfer of funds guidelines, and two unrelated regulations pertaining to trade with Ukraine.
Stefan Berger, the lead Member of the European Parliament (MEP) for the MiCA regulation, expressed his views on the significance of the legislation. He stated that the EU has positioned itself as a leader in the token economy, boasting a diverse range of 10,000 crypto assets. Berger emphasized that this regulatory framework prioritizes consumer protection by safeguarding against deception and fraud. He also highlighted the restoration of trust in a sector that was impacted by the collapse of FTX. Consumers will now have access to comprehensive information and the necessary monitoring of underlying risks associated with crypto-assets. Importantly, the regulation ensures that environmental impact disclosures are taken into account by investors in crypto assets. Berger concluded that this legislation provides the EU with a competitive advantage, offering regulatory clarity that surpasses what is currently available in countries like the United States.
MiCA is scheduled to come into effect in the coming weeks, subsequent to its publication in the official journal of the European Union, which is anticipated to occur in June. The provisions outlined in MiCA offer licensing opportunities to crypto exchanges and wallet providers, enabling them to operate across the 27 member states. Additionally, stablecoin issuers will be obligated to maintain appropriate reserves. The implementation of these measures is expected to take effect within a period ranging from 12 to 18 months.
Initially proposed by the European Commission in 2020, MiCA encountered controversy when lawmakers contemplated incorporating environmentally-focused provisions that could have potentially resulted in a ban on the proof-of-work technology employed by Bitcoin. While the industry generally welcomed the provisions, attention has now shifted towards future EU crypto regulations, which may encompass areas such as staking, non-fungible tokens (NFTs), and decentralized finance (DeFi). These forthcoming regulations are being closely monitored by stakeholders in the cryptocurrency sector.