The European Parliament adopts MiCA legislation that focuses on cryptography

The European Parliament adopts MiCA legislation that focuses on cryptography

The regulatory package, which will be introduced for the first-time in 2020, now requires the approval of European Council before it can come into force.

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The European Parliament has finally voted on the Markets in Crypto-Assets Act (also known as MiCA) after two delays. The legislation was introduced in 2020 for the first-time. It now needs to be approved by the European Council.

Stefan Verger, MiCA’s member of the European Parliament and its rapporteur, Stefan Verger, described MiCA as “a milestone for the crypto assets industry” immediately following the vote on April 20.

MiCA is a tool that European policymakers are using to establish standard regulations, and harmonized rules, for crypto assets on the EU level. This will provide legal certainty for investors and the crypto industry. The regulation will set guidelines for the structure, operation and governance of token issuers. The regulation will also include rules for transparency and disclosure requirements when issuing and trading cryptocurrency.

Chainalysis reports that the provisions of MiCA relating to stablecoins are set to come into effect in July 2024. Other provisions, such as those pertaining to crypto asset service providers, are to be implemented in January 2025.

There is a cautious optimism about the regulation. There are some issues in the 400-page document. The 400-page document is largely devoid of any mention of Decentralized Finance (DeFi), and fails to address the growing crypto lending and stake sector. It also does not specify any rules regarding nonfungible tokens.

Related: The limits of the EU’s new crypto regulations

Janet Ho, Head of EU Policy at Chainalysis said, during a recent panel discussion held as part of Paris Blockchain Week 2023 that the success or failure of MiCA will depend on the reworking certain parts of the documentation. Nadia Filali was also present, the blockchain program director at Caisse des Depots. She stressed that governments, regulators, and industry participants should work together to develop regulations.

According to EU officials, the main task of MiCA is to ensure the safety of investors. In a recent Interview with Cointelegraph , Joachim Schwerin , one of the European Commission’s principal economists, stated that MiCA should reduce the negative effects of future incidents such as the insolvency FTX.