Today, the finance ministers of the European Union unanimously approved the Markets in Crypto Assets (MiCA) regulation. The regulation aims to establish a licensing framework for cryptocurrency businesses operating within the EU, making it the first major jurisdiction globally to implement such a system.
Now, cryptocurrency firms, including exchanges and wallet providers, will be required to obtain a license to offer services throughout the EU. Moreover, stablecoin issuers will need to maintain adequate reserves. The regulation also introduces new measures to prevent money laundering in the transfer of cryptocurrency funds.
EU & MiCA news! 🇪🇺🇪🇺
After the EU Parliament's plenary vote on April 20, MiCA has cleared its last formal hurdle this morning.
It was adopted by the Council of the EU (EU member states) – a purely formal vote after the political agreements last year.
1) Publication… pic.twitter.com/JHKYIVGuxZ
— Patrick Hansen (@paddi_hansen) May 16, 2023
MiCA Getting Approval
The MiCA bill and related regulations and directives received approval from finance ministers representing all 27 member states, from the European Union Council. The MiCA regulation forms a crucial component of the EU’s comprehensive Digital Finance Strategy, which seeks to promote financial industry innovation while safeguarding consumers and maintaining overall financial stability.
The European Parliament’s adoption of MiCA has led also to the endorsement of another two supplementary legislations. These rules relate to the disclosure of information regarding monetary transactions and the administration of specific types of virtual currencies.
The MiCA legislation was originally adopted by the European Parliament on April 20, paving the way for its final approval by the European Council and the enforcement of regulatory limits. This legislation establishes clear regulatory norms and requirements for the use of cryptocurrencies and related services and activities across the European Union. The legislation covers a range of cryptocurrencies, digital assets, utility tokens, and stablecoins.
The EU is becoming one of the first jurisdictions in the world to introduce comprehensive rules on crypto-assets:
Today, @Europarl_EN gave its final green light to EU market rules on crypto-assets, customer protection, financial stability and innovation.#DigitalFinanceEU #MiCA pic.twitter.com/NJUPOpPipk
— European Commission (@EU_Commission) April 20, 2023
MiCA is still in the process of becoming EU legislation. The next crucial step requires the bill to be published in the Official Journal of the European Union. After this particular measure is carried out, MiCA will be enforced within 12 months. It is anticipated that the regulations will be officially ratified by the middle of 2024.
The European Commission introduced MiCA in September 2020, but it has faced numerous hurdles and setbacks throughout its legislative journey.
The MiCA law includes essential components such as mandatory registration and authorization for cryptocurrency issuers, exchanges, and wallet providers. Stablecoin issuers must comply with specific security and risk management regulations.
Additionally, firms providing cryptocurrency custody services must establish sufficient safety protocols to tackle potential cybersecurity threats and operational errors. The law also introduces a structure designed to prevent market manipulation, insider trading, and abusive conduct in the cryptocurrency market.