The European Parliament passed the world’s first comprehensive framework for regulating cryptocurrency platforms, voting 517 in favor and 38 against through the Markets in Crypto Act (MiCA).
The law aims to reduce the risk of consumers buying crypto assets and to hold providers accountable if investors lose their assets.
Protect markets and consumers
Transaction approval and supervision is one of the areas of operation regulated by MiCA, and token issuers and traders will be required to be transparent with consumers when regulation is enacted in 2024.
Additionally, the new legal framework aims to support market integrity by regulating public offerings of crypto assets while including measures to mitigate money laundering and terrorist financing.
According to MiCA, the European Securities and Markets Authority has been asked to set up a public registry of non-compliant crypto assets operating in the EU without a permit.
The EU is one step ahead
As the first major market to regulate the transfer of crypto assets, the EU is one step ahead of other large crypto markets in implementing safeguards for investors.
Stefan Berger, Principal Member of the European Parliament (MEP) on MiCA Regulation, said: Consumers will be protected from deception and fraud, and the sector damaged by the FTX collapse will be able to restore trust.
“This regulation gives the EU a competitive advantage. The European crypto industry has a regulatory clarity that countries like the US do not have.”
“Breakthrough Moment”
MiCA, the first regulatory framework of its kind for the crypto industry, has been hailed as a “breakthrough moment” by industry observers such as: Nigel Green, CEO, Founder of Financial Advisory Devia group.
“[MiCA] It shows the maturity of the market and highlights that cryptocurrencies are now mainstream. Cryptocurrencies have matured in Europe as they have been brought into regulatory tents and held to the same standards as the rest of the financial system.”
For Green, MiCA will help instill confidence in the cryptocurrency market, boost prices, and attract “institutional investors who bring enormous levels of capital, experience and influence.”
The EU in the digital age
Green’s view Antoni Trenchev, CEO and Co-Founder of Nexo, argues that MiCA reflects the EU’s broader transition to the digital age. “Digital assets have long needed a regulatory framework that would ensure a level playing field and provide important investor protection. With the approval of MiCA by the European Parliament, the crypto industry has finally received this affirmation.”
“We believe MiCA will bring Europe into the digital age, foster innovation and fair competition in the industry, enhance consumer and investor protection, and lead to overall financial stability.”
