After two consecutive delays, the European Parliament has carried out the final vote on the Crypto Asset Market Law, known as MiCA. Now the legislation, first introduced in 2020, needs the approval of the European Council before it becomes effective law.
On April 20, immediately after the vote, MiCA rapporteur and Member of the European Parliament Stefan Verger called MiCA “A milestone for the crypto-asset industry.”
Habemus MICA! Das EU-Parlament hat die #Regulierung angenommen. Ein Meilenstein für die #Krypto-Asset-Industrie. Danke an alle Kollegen und auch für den ganzen Support der Community hier! #Mica @btcecho @DECointelegraph pic.twitter.com/avPmOE2Vl0
—Stefan Berger (@DrStefanBerger) April 20, 2023
With MiCA, European policy makers aim to set a standard and establish harmonized rules for crypto assets at EU level, thus providing legal certainty to the cryptocurrency industry and investors. The regulation will establish guidelines for the operation, structure and governance of digital asset token issuers. It will also offer rules on transparency and disclosure requirements for the issuance and trading of cryptocurrencies.
According to Chainalysis, the specific provisions of MiCA related to stablecoins will take effect in July 2024, while others, including those related to crypto asset service providers, will apply in January 2025.
THREAD: [1/6] Today, the EU Parliament voted to pass MiCA – the first comprehensive, EU-wide rules for crypto asset service providers and different crypto assets (including stablecoins).
—Chainalysis (@chainalysis) April 20, 2023
THREAD: [1/6] Today the EU Parliament voted to pass MiCA, the first comprehensive EU-wide rules for service providers of crypto assets and different crypto assets (including stablecoins).
The regulation is widely perceived with cautious optimism. However, the 400-page document raises a number of problems. The current draft generally lacks any mention of decentralized finance (DeFi), does not address the growing sector of crypto lending and staking, and does not specify any rules for non-fungible tokens.
In a recent panel during Paris Blockchain Week 2023, Janet Ho, EU Policy Officer at Chainalysis, said that the success of MiCA would depend on strong feedback and reworking of certain parts of the documentation. She was joined by Nadia Filali, director of the blockchain program at Caisse des Dépôts Group, who highlighted the importance of governments, regulators and industry participants developing regulation together.
However, EU officials emphasized investor safety as MiCA’s main task. As Joachim Schwerin, one of the leading economists at the European Commission, said in a recent interview with Cointelegraph, MiCA should minimize the negative consequences of incidents like FTX’s insolvency in the future.
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