European Union Enacts Groundbreaking Crypto Regulations, Paving the Way for Tailored Industry Rules
MiCA is the EU’s crypto regulatory framework governing exchanges, wallet providers, and stablecoin issuers. It aims to create a unified and secure environment with licensing, identity verification, and reserve requirements.
The European Union has taken a significant step towards establishing itself as a pioneering jurisdiction for the crypto industry by officially enacting the Markets in Crypto Assets (MiCA) regulation. This landmark legislation, signed by European Parliament President Roberta Metsola and Swedish Rural Affairs Minister Peter Kullgren, sets tailored rules for the sector and puts the EU at the forefront.
Alongside the MiCA law, another crucial anti-money laundering regulation was signed, which mandates crypto providers to verify their customers’ identities during fund transfers. The Swedish government, currently holding the EU presidency and overseeing legislative talks, shared this news on Twitter. Additionally, a spokesperson from the European Parliament confirmed that the laws encompass MiCA, fund transfer rules, and two unrelated regulations related to trade with Ukraine.
The MiCA regulation is set to come into effect in the coming weeks after being published in the EU’s official journal, expectedly in June. The provisions outlined in MiCA include granting licenses for crypto exchanges and wallet providers to operate across all 27 EU member states, as well as requiring stablecoin issuers to hold appropriate reserves. The implementation of these provisions will take place within a period of 12 to 18 months.
Initially proposed by the European Commission in 2020, MiCA faced controversy due to environmentally focused provisions that could have potentially resulted in a ban on Bitcoin’s proof-of-work technology. Although these provisions were met with industry approval, attention is now shifting towards future stages of crypto regulation within the EU. Subsequent laws may encompass areas such as staking, non-fungible tokens (NFTs), and decentralized finance (DeFi).
