3 Things To Know About MiCA

By Liam Murphy, Managing Director and Head of EMEA at Wachsman 

EU Lawmakers have now approved the first framework for crypto regulation. Here are the top three things you need to know:

  • MiCA given the Green Light: On April 20th, the European Parliament gave its green light to approve the world’s first comprehensive crypto regulation – a major step forward in the industry’s development. The MiCA (Markets in Crypto Assets) aims to introduce regulations with stifling innovation. The legislation will reduce risks for consumers buying crypto assets, meaning providers will become liable if they lose the crypto assets of their investors. 
  • A New Rulebook: The EU Parliament announced that several rules will come into effect. These rules will have implications for crypto platforms and token holders regarding transparency, disclosure, authorization, and supervision of transactions. In addition, crypto platforms will be required to inform their users about potential associated risks, while new token sales are also set to be regulated. The growth of stablecoins is also expected to be limited, with a proposed cap of €200 million euro in daily transactions per day to be set.
  • Oversight and the Environment: ESMA (The European Securities and Markets Authority) has been given the power to interject and ban or restrict crypto platforms that do not operate under these regulations or threaten market integrity and financial stability. MiCA also addressed environmental worries. Companies will now be expected to disclose their energy consumption and provide evidence of the impact of digital assets on the environment.

While plenty of details remain to be ironed out before it comes into effect, the regulations are expected to bring investors and consumers greater clarity, transparency, and protection. All eyes are on Europe.