The European Union lawmakers are taking steps to regulate the cryptocurrency market through the introduction of MiCA, which is set to mark the end of the crypto “wild west.” MiCA will provide a clear legal framework for the issuance, sale, and trading of digital assets within the European Union, with a goal to enhance transparency, investor protection, and market integrity. This move is expected to bring more stability to the cryptocurrency market and encourage more institutional adoption.
New Crypto Regulations in the European Union Aim to Restore Trust and End ‘Wild West’ Era
The European Union is set to introduce new regulations on cryptocurrency, which will put an end to the industry’s ‘wild west’ era and restore trust. The Markets in Crypto Assets (MiCA) will be voted on at the European Parliament in Strasbourg tomorrow, marking a significant milestone in its passage into law.
According to Ernest Urtasun, a Spanish MEP who contributed to the development of the legislation, MiCA will bring the crypto industry under regulatory oversight and mark the end of its unregulated era. He stated that the lack of regulation has caused massive losses to many first-time investors, provided a safe haven for fraudsters and international criminal networks.
Stefan Berger, the German MEP who was the lead architect of the regulation, hailed it as putting the EU at the forefront of the token economy and restoring trust that was damaged by the FTX case. Under MiCA, companies will be required to disclose conflicts of interest and not use client funds.
While around a dozen parliamentarians voiced their support for the proposal during a debate before the vote, there were also some concerns raised. Irish MEP Chris MacManus admitted that he has no interest in creating a market in, or fostering the use of, crypto assets. However, he supported MiCA because of its emphasis on transparency and consumer protection.
Meanwhile, Dutch MEP Paul Tang compared crypto to the tulip craze of 1637, a historical financial market bubble in the Netherlands. He stated that nobody knows what to use them for, but they are the next hot thing. However, he also conceded that perhaps crypto could achieve “the same thing” one day.
Objections were raised by Gunnar Beck, a German MEP who believed that the EU was “criminalizing decentralized finance and its users” by requiring more transactions to be reported. He added that the EU is establishing a total financial surveillance state.
If passed by the parliament, MiCA will receive final approval from the European Council in May before being officially published. Its rules regarding stablecoins will come into force in July next year, but providers will have time to get up to speed with requirements which won’t come in until January 2025.
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