On Thursday, the European Union became the first significant region in the world to pass a complete crypto law by a vote of 517 to 38 in favour of a new crypto licensing system, known as MiCA. Ernest Urtasun of the Green grouping claims, “the end of the ‘Wild West’ period for the uncontrolled world of crypto assets” is marked with this agreement on the standards. He also stated that the market till recent times “offered a safe haven for fraudsters and multinational criminal networks.”
The decision was made in response to a discussion on Wednesday during which legislators mainly backed proposals to require crypto wallet providers and exchanges to obtain licences to operate across the EU as well as issuers of stablecoins pegged to the value of other assets to keep enough reserves. The primary political objectives of MiCA, which were agreed upon last year, includes call for measures like to maintain sufficient reserves and let crypto exchanges and digital wallet providers provide regulated services within the bloc.
Prior to this, the bill has seen a lot of delayal. The last time it got delayed was on January 18th of this year due to technical issues. Some European countries were compelled to enact a temporary regulation for the industry as a result of the MiCA delays.
Before the introduction of MiCA, certain European countries wished for more stringent cryptocurrency regulation. The need for greater regulation has been partly spurred by the instability in the cryptocurrency market over the last year. This includes the instance where French authorities wished for the implementation of mandatory licensing among all crypto firms.
The vote was open to speakers from the European People’s Party, Socialists, and Democrats, Renew Europe, and European Conservatives and Reformists, which are the four largest political parties in the European Parliament. Along with it, another vote for a different law took place with 529 in favour against 29. As per the MPs’ agenda, the ‘transfer of money regulation’ mandates that cryptocurrency service providers collect information about the identities of their customers.
According to Stefan Berger, the German centre-right member who oversaw the parliament’s deliberations on the bill, MiCA should “restore the trust that was damaged by the FTX case” and offer stability to the industry. He also noted that it will place the EU “at the forefront of the token economy.”
The regulation was initially proposed by the European Commission in 2020. The EU could become the first major region with a comprehensive crypto law when MiCA laws go into force 12 to 18 months after the legislation is published in the Union’s Official Journal, which is anticipated to occur in June. With the countries in the Union already bringing in regulatory rules, this approval could be the trigger for them to adopt many more political amends to assert their stance.