Industry applauded the European Parliament for its landslide decision in favor of new crypto-licensing rules. Now, the focus is on the finer details.

The long-anticipated approval for the Markets in Cryptoassets Regulation will allow the landmark law to protect consumers and ensure financial security to take effect in mid-2024. Initial reactions have been positive.

After the vote, the crypto exchange Cobase said that it was a “turning point for crypto regulation” because the law would “give crypto organisations the confidence to grow and invest in the region.”

The law known as MiCA requires that exchanges, wallet providers, and stablecoin issues hold adequate reserves.

The approval of MiCA by the European Commission is a significant step forward for the crypto industry.

Optimism about MiCA’s impact seems to be matched in the traditional-financial sector. A report by staff at Deutsche Bank (DB), citing likely effects on corporate adoption and volatility, stated that “we perceive regulation as a positive net for the industry.”

Researchers Marion Laboure, Cassidy Ainsworth Grace and others wrote that crypto is a “dangerous unregulated sector” and this has exposed investors to “massive losses across all cryptocurrency platforms.”

How companies prepare is the key question. John Ehlers is the chief operating officer of Bitstamp. He said that although the outline of the law has been known for a while, the 12-18-month transition period will begin ticking on June or July. Getting ready for this will be more difficult for some companies than others.

Ehler, who appeared on CoinDesk’s “First Mover” program on Thursday, said: “For those new to the business and entering the European market, there is a significant change in their way of operating.”

“If you’re new to this space, you’re not going to have very stringent AML (anti-money-laundering) requirements for account opening,” Ehlers said. If you have been regulated by the EU (European Union), then you are probably in good shape.

Even long-established players face a long road ahead. Binance is the largest crypto exchange in terms of volume. It holds a number crypto registrations in the bloc. This includes under the MiCA-like system that is relatively developed and popular in France.

Binance CEO Changpeng Zhao responded to the vote by tweeting that “there are now clear rules for crypto exchanges in the EU to operate.” “We are ready to adjust our business in the next 12-18 month to be fully compliant.”

Zhao added, “The finer details will also matter.”

The overarching MiCA legislation, also known as “level one”, is now in place. However, EU agencies, such as the European Securities and Markets Authority, say that they must draft and consult the ” substantial implementation package ” which lies beneath.

The crypto industry will be closely watching.

Tommaso Astazi said, “There are many things that MiCA level 1 text doesn’t define. There are some questions that will be addressed in the so-called Level 2 legislation,” at an event held in Brussels in late October.

Last-minute disagreements between lawmakers and governments about how to treat non-fungible tokens, and decentralized financing. Compromise language hastily written may not be as clear, for example, on what constitutes a non-fungible or decentralized token.

The EU law establishes a standard that will be enforced at the national level by the 27 members of the EU. Some are worried about countries imposing extra obstacles or, in the opposite direction, undercutting each other to gain business.

In an email sent before the vote, Mark Jennings of Kraken, the head of European operations, said that the final details of the legislation should “ensure consistency MiCA implementation across all member states, particularly at the licensing phase, to ensure level playing fields and avoid regulatory arbitrage,” while also ensuring a smooth transition away from the existing national regimes.

Jennings said that these final steps may be crucial for MiCA’s future success.

He said that “what once seemed to be a lofty legal goal could become a standard for business efficiency and customer protection if the EU gets the technical implementation right.”

Sandali Handagama is the editor.

CORRECTION – (April 21, 1129 UTC) : Corrects Antoni Trnchev’s title of employment.