The EU’s official journal has published the Markets in Crypto Assets (MiCA) regulation, which is a significant milestone for the regulation of the crypto industry. Janet Ho, Head of Policy for Europe at Chainalysis, has warned cryptocurrency companies to start preparing for MiCA as soon as possible to ensure regulatory compliance. While the new policy will not come into effect until the end of next year, companies will need to introduce significant changes to their business models to be fully compliant, which will take time and planning.
Preparations for Regulatory Compliance
Cryptocurrency companies must start preparing for the EU’s MiCA regulation as soon as possible to ensure regulatory compliance. The first rules of the regulation will come into effect on June 29th next year, and the rules will be fully implemented by the end of next year. According to Janet Ho, it may take anywhere from four to five months for applicants to secure a license from the relevant authorities, making it essential to start planning for compliance early. Companies must apply for authorization in their chosen member country and wait up to 25 working days for a response from the authorities. Following that, applicants would have to wait another 60 working days for the authorities to grant or refuse their request. During that time, it might not be possible for the companies to continue operating. Therefore, they need to take into account these four or five months as early as possible.
Benefits of Conforming to Regulations
Conforming to the EU’s MiCA regulation is not only a burden for the firms, as it does come with certain benefits. MiCA would make it possible for firms to “passport” their practices into other EU members without obtaining further authorization from the local authorities. Essentially, if one member nation greenlights them, they will be good to go to any other member country. Becoming compliant would provide great opportunities to scale-up crypto firms and potentially help secure business beyond Europe if MiCA ends up becoming a global standard. At this point, there are no standardized rules in any part of the world. MiCA could fill that void, as it will already be a gold standard across Europe. EU lawmakers have urged other nations to take inspiration from the package when they start creating their own crypto rules. Specifically, US SEC commissioner Hester Pierce noted last month that the US should view regulatory efforts of the UK and EU as a model for its crypto laws.
Cryptocurrency companies must start preparing for the EU’s Markets in Crypto Assets (MiCA) regulation as soon as possible to ensure regulatory compliance. The new policy will come into effect on June 29th next year, and the rules will be fully implemented by the end of next year. Companies must introduce significant changes to their business models to be fully compliant, which will take time and planning. However, conforming to the regulations is not only a burden for the firms, as it does come with certain benefits. It would provide great opportunities to scale-up crypto firms and potentially help secure business beyond Europe if MiCA ends up becoming a global standard.
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