European Crypto Community Divided Over MiCA Legislation
After two consecutive delays, the European Parliament has conducted the final vote on the Markets in Crypto-Assets Act (MiCA), introduced for the first time in 2020. MiCA now needs approval from the European Council before becoming effective regulation.
If approved, the legislation will establish harmonized rules for crypto assets at the EU level, providing legal certainty for the crypto industry and investors. MiCA will also offer guidelines for the operation, structure, and governance of issuers of digital asset tokens and set rules for transparency and disclosure requirements for issuing and trading crypto.
While the regulation is perceived with cautious optimism, there are a number of issues with the 400-page document. The current draft generally lacks any mention of decentralized finance (DeFi), fails to address the growing sector of crypto lending and staking, and doesn’t specify any rules for non-fungible tokens. EU officials emphasized the safety of investors as the major task of MiCA. At a recent panel, Janet Ho, head of EU policy at Chainalysis, said that the success of MiCA would be dependent on robust feedback and the reworking of certain parts of the documentation. Nadia Filali, Caisse des Dépôts Group’s blockchain program director, stressed the importance of governments, regulators, and industry participants developing regulations together.
If the legislation is approved, the specific provisions of MiCA related to stablecoins will come into force in July 2024, while others, including those on crypto asset service providers, will apply in January 2025. Joachim Schwerin, one of the principal economists within the European Commission, said in a recent interview with Cointelegraph that MiCA should minimize the negative consequences of incidents like the insolvency of FTX in the future. Following the vote, MiCA’s rapporteur and member of the European Parliament, Stefan Verger, called MiCA “A milestone for the crypto asset industry”.
Clever Robot News Desk 21st April 2023