Crypto Regulatory Framework Accepted by European Union Member States
The European Union (EU) has adopted a new regulation, called Markets in Crypto-Assets (MiCA), which provides a clear and unified legal framework for crypto-asset issuers and service providers across the EU. The MiCA regulation covers various types of crypto-assets, such as utility tokens, asset-referenced tokens, stablecoins, as well as trading platforms and custodial wallets. The regulation aims to ensure financial stability, investor protection, and innovation in the crypto-asset sector.
The regulation was proposed by the European Commission in September 2020 and approved by the European Parliament on April 20, 2023. It is part of the digital finance package, which includes a pilot regime for distributed ledger technology (DLT) market infrastructures, a digital operational resilience act (DORA), and amendments to existing EU financial services rules. The regulation will come into effect in mid-2024, after being published in the Official Journal of the European Union.
MiCA is the first and only legislation of its kind in the world and sets a precedent for other jurisdictions. It introduces registration and authorization requirements for crypto-asset issuers and service providers, as well as compliance with anti-money laundering rules. It also establishes disclosure obligations, consumer rights, and supervision mechanisms for crypto-assets. The MiCA regulation will create a single market environment for crypto-assets in the EU, encouraging the growth and development of this emerging industry while protecting consumers and ensuring financial stability.