The long-awaited crypto law was agreed in Thursday’s vote, but many details are still waiting to be resolved.
Coinbase: A crucial moment for crypto regulation!
cryptocoin.com As you follow, the European Parliament’s overwhelming vote in favor of new crypto licensing rules was met with massive applause from the industry. But now attention is turned to the details that need to be colored. The long-awaited approval of the Crypto Asset Markets regulation means that the landmark law aimed at protecting consumers and ensuring financial stability could enter into force by mid-2024. Initial reactions were warm.
Shortly after the vote, crypto exchange Coinbase tweeted that the vote was a “crucial moment for crypto regulation” because the law would “give crypto organizations confidence to invest and grow in the region.” The law, known as MiCA, requires exchanges and wallet providers to obtain a license and stablecoin issuers to hold appropriate reserves.
Trenchev: making Europe fit for the digital age
Antoni Trenchev, co-founder and managing partner of crypto lender Nexo, said the approval “shows that the crypto industry has finally received this approval,” and in a statement he said, “MiCA brings Europe fit for the digital age and will foster innovation and fair competition.” Last year, Nexo announced that it would cease operations in the US, saying talks with regulators in the US had reached a dead end.
DB: We perceive it as a net positive for the crypto industry
Optimism about the impact of MiCA seems to be receiving a response in the traditional-finance sector as well. “We perceive regulation as a net positive for the industry,” said a report by Deutsche Bank (DB) employees, referring to potential impacts on corporate adoption, liquidity and volatility. Research analysts Marion Laboure and Cassidy Ainsworth-Grace wrote in the report that crypto is a “dangerously unregulated industry” that “exposes investors in huge losses across all crypto platforms.”
Now the real question crypto- companies of how to prepare
John Ehlers, chief operating officer of crypto exchange Bitstamp, said that while the outlines of the law have been known for some time, there is a 12-18 month transition period that will start operating in June or July, and getting ready will be a bigger task for some than others. Ehler made the following statement:
For those new to this business and entering the European market, this is a step change in how they work. If you are new to this field, you will not have very strict AML (anti-money laundering) requirements to open an account. If you’re already regulated in the EU, you’re probably in pretty good shape.
Binance CEO: Now the game has clear rules!
Even established players have a long way to go. This includes Binance, the world’s largest crypto exchange by volume. It already has a number of crypto registrations within the block, including the relatively well-developed and MiCA-like regime in France. Binance CEO Changpeng Zhao tweeted in response to the vote, saying:
There are now clear rules of the game for crypto exchanges to operate in the EU. We are ready to make adjustments to our business over the next 12-18 months to be in a fully compliant position.
However, Zhao also said, “Fine details will be important.” While the overarching MiCA law, known as “level one” text, has now been set, EU institutions such as the European Securities and Markets Authority say they will need to draft and consult on an underlying “package of key implementation measures”.
Crypto industry players will be watching this process closely
Tommaso Astazi, head of regulatory affairs for the Blockchain lobby group for Europe, said at an event in Brussels last month, “There are many things that the MiCA level one text does not define. “There are questions to be answered in the so-called second-level legislation,” he said.
There have been last-minute disagreements between lawmakers and governments over how the law should handle NFTs and decentralized finance, and the language of hastily prepared consensus may not always be clear about what is or isn’t, for example, an immutable token or decentralized grouping.
Mark Jennings: Needs a smooth transition
While EU law sets a common standard, it will be enforced by individual national regulators in the bloc’s 27 member states, and some worry that countries may introduce extra hurdles or undermine each other to attract business in the other direction. Mark Jennings, head of European operations at crypto exchange Kraken, said in an email ahead of the vote that the final details of the law “ensure consistent implementation of MiCA to ensure a level playing field and avoid regulatory arbitrage among member countries, particularly during the licensing phase” and from existing national regimes. He wrote that he should make a smooth transition. Jennings suggested that these final steps could be crucial to MiCA’s success. In this context, he made the following statement:
What once seemed like a lofty legal goal could soon become the universal standard for customer protection and business efficiency if the EU can get the technical implementation of this framework right.
