The European Union has adopted the “MiCA” regulation regarding the crypto market. It must be approved by the European Parliament and the European Council before it comes into force in 2024.
MiCA has been established since January 2024.
The European Union has finally approved the regulation of crypto asset markets through the European Council. This is the final version approved by the Council of Europe.
The MiCA regulation is due to be approved by the Economic Affairs Committee of the European Parliament on 12 October for final approval. The MiCA Regulation and all its provisions will come into effect from January 2024. It is unlikely that the provisions will come into force sooner.
“The MiCA regulation became the subject of a political agreement between various stakeholders in June 2022, so it is not surprising that the European Parliament must approve the text. Then, once the MiCA law has been translated by lawyers and linguists and published in the Official Journal of the European Union, the countdown to its application will begin. »
Digital Asset Service Providers (PSAN and others) registered with EU regulators will have an additional 18 months to achieve compliance. Some companies have been actively recording lately, especially in Italy, and the information does not escape.
With an EU passport, companies can target customers from other EU countries without having to comply with the requirements of national regulatory authorities. For example, a company registered with the AMF may sell products to customers in European Union countries.
Much of the current debate around DeFi centers around the fuzzy definition of the term. Since this distinction is vital to many DeFi projects, various organizations and institutions are debating its meaning. This includes discussions on DeFi protocols, DAOs, and other related projects.
MiCA legislation treats some NFTs as financial assets – under certain conditions. He is also considering banning companies from paying their customers with stablecoins. In addition, regulation is considering algorithmic stablecoins for its regulation, as well as the inclusion of other types of stablecoins.
Let investors avoid fraud
The MiCa regulation aims to protect investors by regulating the crypto industry. It was initially approved by the European Parliament and Council in July 2017.
The French constitution uses the term PSAN for digital asset service providers. It requires these service providers to obtain a license from the local authorities within 2 months. MiCa sends SMS to service providers named CASP-Crypto-Asset Service Providers instead of PSAN. For a company to be considered a PSAP, at least 15 million users are required.
Since the Covenant law was passed by Congress, the AMF can now register or approve crypto companies operating in France. There are currently 52 registered companies; including recently Crypto.com, Société Générale Forge and Binance. Despite this, no approved company has been approved. This is because the AMF needs the cooperation of the Central Bank to approve new companies.
The Brussels-brokered settlement aims to protect “investors from the dangerous risks associated with investing in crypto assets.” This allows them to avoid operating systems that exist only to be robbed.
The talks in Brussels are taking place in a special context, with the last two cryptocurrency crashes occurring in May and June. During these periods, some assets are weaker than others, including some so-called “algorithmic” stablecoins, such as the collapsed Terra USDT (UST) stablecoin.