A major leap forward in the world of cryptocurrency regulation has just occurred in the European Union (EU).
The Economic and Financial Affairs Council, which consists of the finance ministers of all EU member states, has given their collective nod to the long-awaited Markets in Crypto-Assets (MiCA) regulation.
During the vote on May 16th, the finance ministers of the 27 member states of the European Union approved the MiCA bill, alongside adjustments to various regulations and directives linked with the new legislation.
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In conjunction with MiCA's embrace, the European Parliament threw its weight behind two additional pieces of legislation. These legislations touch on the regulation of information related to funds transfers and certain crypto assets.
The European Parliament officially approved the MiCA legislation on April 20th, paving the way for the final stamp of approval from the European Council.
The Markets in Crypto-Assets (MiCA) regulation outlines transparent regulatory guidelines and requirements for handling cryptocurrencies and their associated services and activities across the EU. Its reach extends to a broad spectrum of digital assets, including but not limited to cryptocurrencies, utility tokens, and stablecoins.
The new legislation also outlines registration and authorization requirements for crypto issuers, exchanges, and wallet providers. Stablecoin issuers are required to meet security and risk mitigation standards, while crypto custody services are expected to have robust security measures to counter potential cybersecurity and operational failures.
Beyond these measures, the legislation also provides a structure to combat market abuse, insider trading, and manipulative behavior in the crypto industry.
After the nod from finance ministers, the next step involves publishing the bill in the Official Journal of the European Union. Given the time frame, it's expected that MiCA will come into effect within a year, making the regulations law by mid-2024.
Although MiCA was initially proposed by the European Commission in September 2020, the path to its current state has been strewn with numerous obstacles and delays.
The EU finance ministers' unanimous approval of the MiCA regulation marks a significant stride forward in crypto regulation, bringing a touch of order to the often chaotic and fragmented crypto world.