The EU’s Markets in Crypto-Assets – MiCA – law was approved by the European Council on Wednesday, which paves the way for authorities to regulate how its citizens trade digital tokens/coins and other service providers should function in EU member states, including digital asset exchanges. It is the first step The European Union is taking toward regulating cryptos.
Before the plan is legally accepted, the European Parliament will vote on it after today’s vote on October 10. It is anticipated that the document will be taken into the EU’s Official Journal after being translated into more than 20 official languages of the EU to establish its enforcement formally.
The European supervisory authorities will work out further specifics of applying the regulations for crypto-asset service providers after MiCA is reached in the EU’s official journal early next year. Moreover, MiCA includes a 12 to 18-month adaptation time, ideally going into effect at the beginning of 2024.
MiCA Regulation Focuses On Stablecoins
Before the summer, the European institutions debated the rule’s technical specifications after reaching a political consensus on MiCA in June. However, MiCA has introduced guidelines for cryptocurrency service providers, such as mandatory identification procedures and criteria to be met when providing stablecoins. It comes after Terra’s collapse, which highlighted the need for stricter regulations on stablecoins.
Nevertheless, this year, stablecoins and the larger cryptocurrency market are being closely watched by several regulatory bodies in addition to the European Council. The White House also took its most significant regulatory action to date last month when it unveiled the first U.S. regulatory framework for crypto assets.
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The document, which was released following President Biden’s signing of an Executive Order on Ensuring the Responsible Development of Digital Assets, sheds light on how the US government presently sees crypto regulation. It also highlights the need for organizations such as the Treasury and Securities and Exchange Commission to closely monitor this marketplace over the next few months.
The United States has made it apparent that it agrees with the European Union that the time is right to begin managing the asset class in the wake of a months-long bull run and subsequent market crash.
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