The Economic and Financial Affairs Council of the European Union has given the Markets in Crypto Assets (MiCA) regulation the final green light. The council, which is made up of finance ministers from all 27 member states, unanimously adopted the regulation on May 16th following the final parliamentary vote on April 20th. Two additional legislations were also adopted, including one that regulates the information accompanying transfers of funds and certain crypto assets.
According to Stefan Berger, a member of the European Parliament, the adoption of the MiCA regulation puts the European Union at the forefront of the crypto industry. Berger also mentioned that the industry’s trust was damaged by cases such as FTX and other similar events. However, through a balanced regulatory framework, the industry can have stability in its early stages.
Before becoming EU law, the MiCA regulations need to be published in the Official Journal of the European Union, which is expected to happen soon. The law is expected to be in effect by mid-2024.
The MiCA regulation will enforce uniform regulations for a variety of cryptocurrencies such as utility tokens, asset-based tokens, stablecoins, and more. It will also require issuers of cryptocurrencies, exchanges, and wallet providers to seek registration and authorization. These entities will also have to comply with anti-money laundering laws to ensure the safety and transparency of the industry.
Moreover, stablecoin issuers will have to meet specific risk mitigation and security requirements and ensure they have enough cash to back up their assets. Crypto custody services will also need to have enough cybersecurity measures to protect themselves against possible threats.
Elisabeth Svantesson, the Finance Minister of Sweden, noted that the MiCA regulation will increase transparency and protect investors. She also mentioned the necessity of imposing rules to prevent the misuse of the crypto industry for the purposes of money laundering and financing terrorism.
In conclusion, the adoption of the MiCA regulation establishes a balanced regulatory framework for the crypto industry that will promote stability and transparency. The European Union is leading the way in the industry, and this regulation will make it easier for investors to navigate the market while also ensuring their safety.