May 17, 2023

EU Approves MiCA To Regulate Crypto Industry



The European Union became the first regional bloc in the world to adopt a comprehensive regulatory regime for the cryptocurrency industry.

The Economic and Financial Affairs Council of the EU, which comprises the finance ministers of the 27 member states, voted for the Markets in Crypto-Assets (MiCA) regulation weeks after the European Parliament approved a consensus version, according to Cointelegraph.

MiCA will gradually go into effect by the next year as the rules will be applied on the stablecoins in July 2024 and on the crypto assets in January 2025.

The European Parliament, earlier, adopted two more pieces of legislation, including regulation on information accompanying transfers of funds and certain crypto assets.

Under MiCA, European policymakers can set standard regulations and establish harmonized rules for crypto assets at the EU level, thereby providing legal certainty for the crypto industry and investors. The regulation sets up guidelines for the operation, structure, and governance of issuers of digital asset tokens, in addition to offering rules on transparency and disclosure requirements for issuing and trading crypto.

It also establishes a framework that prevents market abuse, insider trading, and manipulative behavior in the cryptocurrency space. To become an EU rule, MiCA must be published in the Official Journal of the European Union.

Meanwhile, cryptocurrency service providers widely welcomed the legislation because it creates an opportunity to consider the EU a single market environment across Europe regarding regulatory requirements and operating procedures.

Moreover, the European Commission is expected to issue a draft law on promoting the digital euro and develop its metaverse strategy in May.

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