The European Union is ready when the regulation of the crypto asset market called MiCA is renewed. The law is expected to go into effect in early 2024 or later.
The European Union gradually innovates
Today, October 5, the Council of Europe members adopted the MiCA document that establishes rules for how digital asset exchanges and other service providers should operate in different countries and EU member states.
However, the only Regulator keeping a close eye on stablecoins and the broader crypto space this year is not the European Council whose White House also made the biggest move regarding regulation regulating the nascent sector last month, releasing the first framework for regulating crypto assets in the United States. The way the US government is thinking about crypto regulation, urges agencies like the Treasury and the Securities and Exchange Commission to continue their oversight in the coming months. Like the European Union, after a multi-month rally and subsequent market crash, the US has made it clear that it thinks now is the time to start monitoring the asset class.
So, after today’s vote, the European Parliament will also vote on the proposal on October 10 before it is officially adopted. If agreed, it is expected to go into effect as early as 2024.
How will MiCA protect users?
MiCA proposes regulations for crypto asset service providers, including measures such as identity checks and minimum requirements for stablecoin reserves. Mandatory identity checks have become commonplace among crypto businesses hoping to curb money laundering for several years, but stablecoin restrictions have recently become a focus of regulators in the industry—Terra’s failure scene.
MiCA seeks to impose restrictions on dollar-denominated stablecoins such as USDT and USDC — something crypto advocates have been interested in citing their prominence in the industry versus euro-based stablecoins. Regulations related to stablecoins were revised last month, but harsh restrictions were later reintroduced after French officials raised concerns about maintaining the euro’s sovereignty.
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