EU Finance Ministers Give A Green Signal to MiCA Crypto Regulations

In the latest, the Economic and Financial Affairs Council of the European Union, that comprises of the finance ministers of all member states, have given the approval to the highly-anticipated Markets in Crypto-Assets (MiCA) regulation after the vote on Tuesday, May 16.

As per the details, finance ministers from 27 member states have voted in favour of the MiCA bill along with amendments to several regulations and directives relating to the new legislation.

Two additional pieces of legislation that includes regulation on information relating to the transfer of funds and certain crypto assets have been also adopted by the European Parliament in conjunction of adoption of the MiCA assets.

Earlier this year on April 20, the European Parliament had formally adopted the MiCA legislation paving the way for the final approval by the European Council before the regulatory parameters kick-in. The MiCA regulation puts clear regulatory guidelines and other requirements for using digital assets and other related services and activities across the European Union. Also, the scope of this legislation covers a range of digital assets, cryptocurrencies, stablecoins, and utility tokens.

The next step is now a long process that involves the MiCA legislation to become part of the EU law and the bill to be published in the Official Journal of the European Union. As per the current estimates, MiCA will come into effect within a year from now and the regulations will finally become a law mid-way through the legislative process.

The MiCA legislation has been welcomed by several crypto service providers and other proponents of the industry. In fact, many believe that MiCA could attract more crypto players to set up base in the European continent. This is quite a welcoming move since the US has been struggling to bring clear regulatory measures for crypto industry players. Also, the recent crackdown by the US regulators has served as a deterrent from local players, who are now looking to shift base to overseas locations.

Furthermore, MiCA will provide a single market environment across Europe for operating procedures and regulatory requirements. The key components of the MiCA regulation include the registration as well as the authorization requirements for the issuers of digital assets, wallet providers, and exchanges.

On the other hand, stablecoin issuers will have to meet certain security and risk mitigation requirements. Similarly, crypto custody services should ensure sufficient security and safety measures to address the potential cybersecurity and operational failures.

Furthermore, the MiCA legislation has a framework to prevent market abuse, manipulative behavior, and insider trading in the crypto space.