EU Brace Up For Final Vote On MiCA Regulation

The European Union (EU) bloc is set to become the first jurisdiction to have comprehensive regulations for the crypto industry. With the forthcoming Markets in Crypto Assets (MiCA) law, advocates believe the legislative scope will go beyond the region as others look up to Europe to lead the way.

MiCA’s Final Vote Nears

The race for implementing a robust crypto regulation for Europe has been in the making for a long time as the bloc begins the countdown to the final voting process. Moreover, the MiCA bill saw several years of high-level consultations, and lawmakers divided opinions before the European Commission decided on the final decision.

Per reports, the European Parliament is set to vote on the final text of the crypto law later in April. Accordingly, the new regulation is expected to become effective in July, while the significant provisions for its implementation will begin in the next 12 to 18 months.

MiCA seeks to oversee the activities of digital asset service providers, regulating white papers and ensuring all pieces of information are accurate. In addition, crypto exchanges and other platforms must apply for approval from any of the 27 national regulators under the EU to secure an operating license.

Meanwhile, there are expectations from industry players that MiCA would also offer broader credibility to the fledgling digital asset ecosystem after a tumultuous year. Given its significance, the government and private industry players are starting to take up an interest in MiCA.

According to Rok Zvelc, a European Commission staff member and a MiCA drafting committee member, crypto service providers will become like brands in the EU. He noted that getting a license will be like a stamp of approval in the crypto sector.

Impact On Stablecoins

Furthermore, stablecoin issuers are confident that the MiCA rule will positively impact the token and their issuers. According to Teana Baker-Taylor, Circle’s vice president of policy and regulatory strategy, MiCA is a welcome addition to the crypto sector.

The Circle executive noted that the new law would serve as the global regulatory framework for further industry oversight. Baker-Taylor explained that the USD Coin (USDC) issuer intends to use the new regulatory framework as the foundation for developing its euro coin (EUROC), a stablecoin pegged to the euro.

Alarmed by the Facebook Libra initiative and later by the collapse of the Terra USD ecosystem, EU decision-makers sought to ensure that cryptocurrency backed by other assets must have enough reserves. Baker-Taylor further explained that the new law would clear any regulatory obstacles, benefiting the industry and the broader market despite the restriction.

However, recent discussions about the upcoming regulation show that it doesn’t cover all aspects of crypto lending and staking, non-fungible tokens (NFT), and decentralized finance (DeFi). In addition, MiCA needs to go further in dealing with major industry players like Binance.

An Uncertain Race

Analysts noted that the EU member countries are in a race to see which will emerge as a crypto hub in the bloc. Hence, there is so much currently at stake.

By its content, MiCA has set out the process that each country can follow to regulate its local crypto industry. Still, local authorities can modify these regulations based on differences in jurisdictions.

As a result, observers note that it is a race where no one has the edge over the other. Per reports, Dutch regulators revealed that they are not looking to make any regulations outside what’s obtainable in MiCA as they are not competing with other authorities in the region.

Meanwhile, observers believe there may be more than one winner in this race as different nations within the EU bloc play to their strengths. For example, Belgium can dominate business-to-business blockchain services more than the crypto retail market.

Nevertheless, some experts opined that the earlier MiCA is voted into law, the better for the industry and Europe’s financial sector.

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