The European Union has unanimously adopted the Markets in Crypto-Assets (MiCA) regulation, which is hailed as the world’s first comprehensive regulatory framework for the cryptocurrency industry. The regulation will be implemented gradually, with rules for stablecoins taking effect in July 2024 and provisions for other cryptoassets starting in January 2025.
Under MiCA, crypto-asset service providers can be held liable for losses due to cyberattacks, thefts, or malfunctions, and they must register with a national financial regulator and provide detailed whitepapers. Platforms registered in one EU country will be allowed to operate throughout the entire bloc.
The regulation also imposes minimum cash reserve requirements for crypto trading platforms and grants regulators the authority to suspend providers for up to 30 working days for violations.
However, there is debate among industry executives about the definition of “fully decentralized” and the scope of the regulation’s applicability.
Overall, the regulation aims to bring regulatory clarity to the cryptocurrency industry, attracting capital and entrepreneurs from around the world.
Supporters believe it will help address volatility and enhance consumer protection in the crypto market, while some anticipate potential enforcement and litigation cases regarding certain aspects of the regulation.
