The European Union (EU) is set to witness significant changes in its cryptocurrency sector with the implementation of the Markets in Crypto-Assets Regulation (MiCA), marking a pivotal moment for stablecoins and crypto service providers.
MiCA’s rollout will occur in stages, starting with regulations impacting stablecoins effective from June 30. By December, rules affecting crypto service providers will also come into force.
This legislation represents the EU’s first comprehensive framework for crypto assets, addressing regulatory gaps that have existed since discussions began in September 2020.
The EU Parliament approved MiCA in April 2023, signaling a landmark move towards regulating the crypto industry within Europe’s financial ecosystem. The publication of MiCA in the Official Journal of the European Union on June 9, 2023, paved the way for its gradual implementation.
To understand the implications of these initial MiCA rules, Cointelegraph reached out to industry experts across Europe.
Immediate Impact
According to Reinis Znotins, Executive Director of the Latvian Blockchain Association, MiCA’s introduction will have a significant psychological impact by legitimizing crypto businesses in the EU. Znotins noted, “There’s no longer speculation about the legitimacy of crypto business in the EU. The EU Parliament’s approval has provided a clear legal framework.”
John Egilsson, former chairman of the Icelandic Central Bank and co-founder at Monerium, emphasized MiCA’s role in providing regulatory clarity while causing market disruption. “EMIs and CASPs now face compliance requirements,” Egilsson stated. “Non-compliant stablecoins could face delisting by June 30.”
Transitioning from Non-Compliant Stablecoins
As a result of MiCA, many EU-based crypto exchanges, including Uphold, Bitstamp, Binance, Kraken, and OKX, have already begun delisting stablecoins like Tether (USDT).
Egilsson suggested that non-compliant stablecoin issuers may exit the EU market, with potential growth in demand for Euro-backed stablecoins as regulatory confidence among retail investors increases.
Laura Chaput, Head of Regulatory Compliance at Keyrock, shared her view, “Despite restrictions, there’s a possibility of stablecoin market growth due to enhanced regulatory protections, boosting retail investor confidence.”
Recent Developments
On June 13, the European Banking Authority (EBA) issued final reports on Regulatory Technical Standards (RTS) for e-money tokens (EMTs) under MiCA, set to take effect alongside other MiCA provisions on June 30.
This revision aims to clarify MiCA’s impact using accessible language while maintaining the core information about its regulatory framework and market implications in the EU.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
