Officials of the European Union agree on the application of the Cryptoactive Markets Law (MiCA) that establishes rules for the regulation of the bitcoin (BTC) ecosystem and other cryptocurrencies.
The rules are expected to take effect next year. However, the European community is analyzing and evaluating the aspects included in the legislation, as well as its impact on the European digital asset industry.
As some members of the Twitter community are highlighting, the MICA law has positive aspects for the cryptocurrency sector in Europebut they also see that there are negative elements that will add obstacles for the ecosystem to flourish in the region.
One of the points that Europeans consider most valuable about MiCA is that it definitely bitcoin and its proof of work (PoW) will not be banned.
Proponents of the crypto pioneer see this as a particular victory. especially because The protests that arose from the community were what forced the legislators to discard the proposal.
Previously, Parliament’s discussions revolved around the possibility of Permission will be denied to all services based on the consensus mechanism or PoW, which is the one implemented in bitcoin to generate new cryptocurrencies.
Some inhabitants of Europe consider that the entire content of the text is positive.
“In my opinion these people know what they are doing. After reading this I conclude that the EU [Unión Europea] trust in the power of decentralization and cryptoeconomics. All of this will improve the cryptocurrency ecosystem by establishing best practices as law.” he pointed a Twitter user.
multiple users stand out that the MiCA law will positively impact the cryptocurrency space in Europe. Though there are others who do not see the law as positive and question the entire documentestimating that the regulators are establishing rules for an ecosystem that they know little about.
“The EU elites don’t know how to keep inflation down, they don’t know how cryptocurrencies work, they don’t understand that innovation. But what they really know is that you have to regulate!” wrote the user @DonLucassHere.
Key points of the MICA Law
The MiCA law conforms to the European Union’s crypto asset transfer regulation, which was approved yesterday and represents one of the elements most repudiated by the community. This because of hampers private transactions of bitcoin and other cryptocurrenciesforcing exchanges to record and store user data, including non-custodial wallet owners.
The normative does not include any consideration of non-fungible tokens (NFTs), since the European Parliament will evaluate in the future the need to design specific rules for other sectors of the ecosystem. This is something that the Europe reporter, Bjarke Smith-Meyer, see as favorablespecially for musicians, artists and other creators who “will be able to tokenize their works without having to bury yourself in regulatory paperwork.”
However, Smith-Meyer also highlights that any NFT project that “feels or smells like a financial instrument” will be regulated by MICA to ensure that no company in the industry can circumvent the rules.
Other points that the reporter highlights about MiCA is that exchanges and other cryptocurrency service providers must be licensed to do business in the European Union. It also establishes constant supervision and a periodic report to be sent to the European Securities and Markets Authority (ESMA).
Similarly, the law requires crypto-asset companies to comply with strict requirements for consumer protection and assume responsibility in case of loss of user funds.