News - EU Council unanimously approves MiCA regulation

By Mike Hesp

EU Council unanimously approves MiCA regulation

Laws and regulations
Developments

In the years-long obstacle race, the MiCA regulation has cleared another hurdle: EU Council approval. This further distinguishes the economic zone from the US.

The European Union (EU) has cleared a new hurdle in implementing the MiCA regulation. The European Council adopted the groundbreaking legal framework unanimously approved. That the 27 finance ministers of all EU member states would oppose the legislation already passed in the EU parliament was anyway not expected. A milestone: The formal adoption of the regulation today, May 16, is the final step in the legislative process.

This makes Europe the first major economic zone to have its own crypto regulation gets. This was also urgent, the Swedish finance minister stated in a statement:

''Recent events have confirmed the urgent need to introduce rules that better protect European investors and prevent the misuse of the crypto industry for money laundering and terrorist financing.''

MiCA regulates crypto service providers

The regulation brings especially drastic changes for service providers, who from 2025 will be subject to a host of new regulation will have to comply. For example, crypto providers (so-called Virtual Asset Service Providers, or VASP for short) will need a mandatory license in the future if they want to operate in the EU. However, the license will then apply to the entire economic zone.

In addition, the MiCA regulation requires crypto projects to publish a "white paper" detailing the operations and design of the coins or tokens. For EU citizens, these measures bring one thing above all: consumer protection.

What happens next with MiCA?

But the regulation is far from covering all areas. Staking, lending, NFTs and, last but not least, the area of decentralized finance (DeFi) have so far been left out of the crypto regulation. These topics will be addressed in a follow-up regulation. In the current MiCA version, Parliament has instructed the Commission to "monitor developments in the NFT market." The EU may well address the area of bored monkeys, ordinates and the like after this.

Europe catches up with the U.S.

While European crypto companies can now follow clear rules, the U.S. is far behind. Cause: The industry overseas is currently struggling. In recent months, regulators have sharpened their tone toward the industry. At the forefront: the Amerikaanse Securities and Exchange Commission (SEC). The authority launched a series of measures against several crypto companies in the United States. The accusation is always the same: Trading in unregistered securities.

Instead of developing a clear regulatory framework, the SEC prefers to rely on existing rules. US-based crypto companies are gradually getting fed up with this and are looking abroad. Europe, among others.

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