The Markets in Crypto-Assets (MiCA) regulation passed in the European Council on October 5th. The development is a significant step toward bringing a consistent legislative landscape to the continent that has been, so far, fragmented.
The text of the laws was signed off by the representatives of the bloc’s member governments in the EU’s Council. The policies are expected to go into effect in 2024.
Creating a Consistent Regulatory Framework in the EU
MiCA will eliminate the need for national implementation laws by introducing the first-ever licensing regime for crypto wallets and exchanges to operate across the 27 member countries of the EU. It also aims to establish reserve requirements on stablecoins. To fight tax evasion and money laundering, an additional law will be instated on funds transfers that will require crypto-wallet service providers to verify their customer identities.
First proposed by the European Commission in September 2020, MiCA was adopted by the European Council in 2021, also focuses on addressing certain sections of the cryptocurrency industry which are currently out of the scope of existing regulations.
Lawmakers at the European Parliament will have to formally greenlight the text, following which it will be translated to over 20 official languages in the EU. The newly established laws will then undergo an adaptation period of 2-18 months. The text of the bill is currently sealed, but it is expected to be covered by the EU’s official journal before it would go into effect in 2024.
Bitcoin, Crypto At the Forefront
The move marks the first time globally that lawmakers have set out to oversee the asset class on such a scale. While acknowledging that addressing crypto alone in the EU is not enough, Mairead McGuinness, EU commissioner for financial services highlighted the need for global engagement and sharing of experience.
In a recent media roundtable hosted by Bloomberg News in Brussels, McGuinness revealed that the EU seeks is to exchange views on the development of crypto legislation with US officials during next week’s International Monetary Fund-World Bank annual meetings.
“We have a crowded agenda for the US next week, and one of the items that won’t be at the bottom of the list, it will be in there right around the top is crypto”