Crypto industry reacts to MiCA: is Europe the new hub for innovation?

Today the Markets In Crypto Assets (MiCA) Regulation was passed in the EU Parliament by an overwhelming majority.

MiCA introduces a “harmonized” regulatory approach across all member states. The new regulation will apply to a number of crypto market operators, including exchanges, wallet providers, and those giving advice on crypto assets. These regulated entities are collectively referred to as Crypto Asset Service Providers or “CASPs” for short.

CASPs will be subject to a number of rules, including a new licensing and supervisory regime. Stablecoin issues will also have to comply with capital requirements if they wish to provide services in the EU.

Read more: What is the MiCA Regulation and how will it impact crypto?

The Parliament also voted in favor of the Transfer of Funds Regulation, which contains a provision requiring crypto exchanges to identify the sender and beneficiary (for transactions of 1000 EUR or more).

Crypto Industry’s Reaction to MiCA

MiCA appears to have received a relatively warm reception in the crypto industry. CEO of Binance, CZ noted that overall MiCA is a “pragmatic solution” due to the fact that there will now be clear rules for crypto exchanges to follow in the EU.

Monty Metzger, Founder of Liechtenstein-based crypto exchange LCX, noted that with the introduction of MiCA, Asia and the USA are now “falling behind” Europe.

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European Securities Regulator, ESMA, however, noted that while MiCA was a significant step towards ensuring robust protection in the crypto markets, investing in cryptocurrencies is “still a risky endeavor with limited safeguards at this stage”.

Next Steps for the MiCA Regulation

The MiCA Regulation is due to enter into force in 2024. Prior to its implementation, a number of formal steps will have to take place, including a vote by the council and publication of the final text in the Official Journal of the EU.