MiCA regulation unanimously approved by EU Council, here’s what it entails
- The EU’s Council unanimously passed MiCA and also agreed on additional anti-money laundering safeguards for cryptocurrency transfers.
- Members of the crypto industry have hailed the regulatory clarity regarding cryptocurrency in Europe.
The European Union (EU)’s Council, representing 27 member states, today unanimously passed the Markets in Crypto Assets legislation (MiCA), making the EU the world’s first major jurisdiction with a crypto licensing scheme. It also agreed on additional anti-money laundering safeguards for cryptocurrency transfers.
Finance ministers will shortly formalize their agreement to new rules. These new rules would allow tax agencies to exchange information on cryptocurrency holdings of the public.
MiCA aims to safeguard investors by boosting transparency and establishing a complete framework for issuers and service providers. This included anti-money laundering compliance. The new restrictions apply to issuers of utility tokens, asset-backed tokens, and stablecoins.
It also includes service providers, such as trading platforms and wallets, where crypto-assets are stored.
The MiCA establishes a unified regulatory framework in the EU. This, given the global nature of crypto markets, is an improvement over the existing scenario, which is characterized by national regulation in only a few member states.
Crypto tycoons hail regulatory clarity in Europe
Patrick Hansen, the EU Policy Director at USD Coin (USDC) stablecoin issuer Circle, tweeted that the “MiCA effect” has increased VC investment in European crypto ventures about tenfold in a year. He shared a PitchBook screenshot, indicating that Europe received 48% of the total VC financing for crypto enterprises in Q2 2023.
The MiCA effect 🇪🇺🚀
The share of VC investment into European crypto projects is up almost 10x in one year – from a share of 5.9% in Q1 2022 to 47.6% in Q2 2023.
Regulatory clarity attracts capital & entrepreneurs from around the world. Great development for crypto in Europe! pic.twitter.com/kUVp3rwlg3
— Patrick Hansen (@paddi_hansen) May 9, 2023
Additionally, Binance CEO Changpeng Zhao hailed the bill on Twitter when it was enacted by the European Parliament last month, saying that it will protect users and support innovation.
Richard Teng, Binance’s regional head for Asia, Europe, and MENA, tweeted last week,
“The new MICA framework provides regulatory clarity and consistency for crypto businesses in EU. A model for other regulators to emulate.”
However, Crunchbase reported last month that while the new MiCA regulations are drawing investors’ attention to European markets, VC financing for crypto enterprises has dropped by 82% in the first quarter of 2023.