MiCA law affects global crypto community

Lawmakers in the European Union have settled upon and formulated an approach for crypto regulation. The new regulation will address crypto traceability concerns within the region, protecting investors against potential market manipulations if any. It also imposed conditions on other digital asset types such as stablecoins.

The MiCA Agreement 

Both the European Parliament and its Council Presidency have concurred upon the MiCA proposal. An acronym for Markets in Crypto-Assets, the newly-agreed regulation will impose an authorization requirement for crypto service providers to operate within the region. 

The agreement will feature a regulatory framework for investor fund protection. Safeguarding consumers from frauds and scams, the MiCA proposal also proclaims that the service providers should be held liable if they happen to lose consumer assets and/or their wallets.EBA, the banking authority of Europe, will also disclose a public register of service providers not complying with the rules. 

New Crypto Regulations Applicable on Stablecoins

The new crypto regulations are also applicable across stablecoins. A recent press release from the EU anointed the EBA as the supervisor for stablecoin issuers. Stablecoin holders can ask for a claim whenever necessary, and free of charge. 

The French Minister for Economy, Finance and Industry and Digital Sovereignty, Bruno Le Maire, aired his opinions on the subject, stating,

“Recent developments in this quickly evolving sector have confirmed the urgent need for an EU-wide regulation. MiCA will better protect Europeans who have invested in these assets, and prevent the misuse of crypto-assets, while being innovation-friendly to maintain the EU’s attractiveness. This landmark regulation will put an end to the crypto wild west and confirms the EU’s role as a standard-setter for digital topics.”

Also Read: Brazil Senate Approves Regulation Bill for Crypto Transactions

The Impact of the New Regulation

Analysts agree that the MiCA consensus has been a major milestone for the European Union. The three legislative proposals acknowledged by the European Commission, in addition to the Digital Finance Strategy which was initiated in 2020(DORA, pilot DLT and the MiCA) will conclude in a strong framework of standards for the crypto community. Some naysayers may view the policies as oppressive or regressing backward for new-age innovations. On the other hand, a notable section believes that the current legislation puts the EU on the forefront of standardized crypto regulations. 

In addition, the Commission is also developing reports exploring crypto’s impact on the environment. Crypto asset providers need to furnish information in regard to their impact on the environment and climate footprint. The data will be collected by the European Securities and Markets Authority and utilized afterward for establishing other regulatory standards. 

Also Read: What can Governments and Policy Makers do for Blockchain Mass Adoption?

Global View on Regulations

Calls for regulation and enhancing crypto security features have been existing for a while. Research indicates an increasing number of people are looking forward to crypto regulation in the upcoming days. 68% of UK respondents in a survey prefers to see crypto regulation in the near future. With 61% of them being worried about falling victim to crypto frauds. 

PayBitoPro Chief Raj Chowdhury had previously explained how crypto licensing had promoted crypto development in the UAE. He also mentioned the need for prioritizing crypto security, balance and active association among crypto ventures. In regard to crypto scams, he recommended better crypto education and awareness as a must to prevent being a victim.

In addition to the UAE, other nations are also bringing crypto regulation or authorization licenses. The Monetary Authority of Singapore(MAS) regulates cryptocurrencies. The US Congress is debating on bringing crypto regulation legislation. Brazil also passed bills for cryptocurrency regulation in recent times. 

Wrapping Up

The crypto landscape is swiftly transforming into a dynamic and innovative environment, necessitating an effective regulatory framework. Contrary to popular belief, the framework would lead to sustainable growth in the crypto markets, promoting further adoption of digital assets across the globe.