The European Union lawmakers have given final approval to the MiCA crypto legislation, which sets out rules for cryptocurrencies and digital assets. By providing a clear regulatory framework, the MiCA crypto legislation aims to protect consumers and investors and promote innovation in the crypto industry. This move is expected to boost the legitimacy of digital currencies across the EU and make it easier for crypto companies to operate across borders.
The European Parliament has approved the Market in Cryptoassets (MiCA), a regulatory framework that aims to set new standards in the cryptocurrency industry. This approval comes around five months after the infamous FTX collapse and aims to protect investors from such failures.
The MiCA legislation is expected to come into effect from July 2024, while broader rules on crypto providers should become live from January 2025. The regulatory framework will require digital asset operators to identify their clients for any transfer of their funds to prevent money laundering.
The new cryptocurrency licensing policy also supports a separate law that has been used in traditional finance, “the travel rule,” which will cover cryptocurrency transactions. It will provide customers with information about the source of their assets and beneficiary. This rule will also apply to transfers worth above €1,000 (around $1,100) from crypto wallet addresses to private users, but it will not cover person-to-person transactions.
The European Commissioner for Financial Stability, Financial Services, and the Capital Markets Union, Mairead McGuinness, praised the MiCA legislation, stating that it sets the world’s “first comprehensive crypto rules.” She emphasized that such standards are vital, primarily due to the multiple crashes and scandals that shuttered the industry last year.
Numerous industry leaders have been alerting that imposing appropriate supervision on the cryptocurrency sector is a must. The CEO of Binance, Changpeng Zhao, highlighted the EU’s move and argued that it gives more protection to consumers and fosters innovation of the asset class.
Meanwhile, the Coinbase CEO, Brian Armstrong, recently urged the American authorities to apply regulations on the industry; otherwise, the nation might witness an outflow of companies and talent. He even hinted that his exchange could relocate overseas should the situation remain unchanged.
In conclusion, the approval of the MiCA regulatory framework comes as a significant move for the industry. It will set global standards regarding cryptocurrencies, providing investors with the necessary protection they need in the space. While other nations across the world are expected to follow suit, it remains to be seen how their regulations will differ from those of the EU.