EU Parliament Finally Passes MiCA as Industry Lauds Effort
Coinspeaker
EU Parliament Finally Passes MiCA as Industry Lauds Effort
The European Union (EU) has now broken the record of being the first region in the world to pass the most comprehensive regulations to guide the broader nascent digital currency ecosystem. The recent approval came from the EU Parliament who voted for the bill by a massive 517-38 alongside 18 recorded abstentions.
Now that the bill is passed, its next major push will be its addition to the EU Journal at a time projected to be around June. Once it makes it to the ledger, the implementation or enforcement actions for the rules will be billed for next year. This passed bill is tagged the first of its kind in the world, placing the EU as a frontrunner in regulations bordering on cryptocurrencies.
“We’re protecting consumers and safeguarding financial stability and market integrity,” European Commission’s Mairead McGuinness said in a recent tweet “The rules will start applying from next year.”
The EU first introduced the Markets in Crypto Assets (MiCA) bill back in 2020 and has since been hitting significant milestones in a bid to get the rules live. With the passage of the bill, Virtual Assets Service Providers (VASP) have the right clarity they need as it concerns licensing regimes when operating within the EU.
Additionally, stablecoin issuers will also have guidance with respect to the reserve requirement for the coins in a bid to preserve liquidity across the board.
While the EU is setting the pace for others to follow, the goal remains to minimize the impact of crypto firm’s collapse and possibly, to prevent them altogether. With the MiCA passed and set to go into effect next year, market participants can take a good stock of their positions in accordance with the law to make necessary adjustments.
EU MiCA Laws and the US Laidback Approach
While the EU is in the final stages of making MiCA a reality and hence fosters a more defined market participation, the industry has been fussing around the laid-back approach of the US in relation to floating similar rules.
“The European crypto-asset industry has regulatory clarity that does not exist in countries like the U.S.,” said Stefan Berger, the EU Parliament Member appointed to lead the negotiations. Berger noted that the EU is now at the forefront of the token economy, making the US, UK and other countries to play a second fiddle. “The sector that was damaged by the FTX collapse can regain trust.”
The collapse of Three Arrows Capital (3AC), Celsius Network, FTX and Genesis impacted investors in several countries, and while the US has resorted to regulation by enforcement, market players are pushing to move their businesses to regions with better clarity to accommodate the innovation.
“You hear some chatter about people moving to Europe, but they’ve never dealt with European regulations, and they’re not exactly the easiest to navigate,” said Sean Tuffy, a financial regulatory expert based in Ireland. Tuffy added that MiCA clears any potential remaining gray areas in EU securities laws for digital assets.