Regulation: EU Adopts MiCA!

Regulation: EU adopts MiCA! This Wednesday, the members of the European Council approved the MiCA text (Markets in crypto assets). This is an essential step towards the establishment of concrete rules on the exchange of digital assets for the member countries of the European Union.

MiCA: Entry into force in 2024?

Starting in 2018, following the first explosion of the crypto market, the MiCA episode begins a new stage. Indeed, this Wednesday, the text has just been approved by the members of the European Council. But after today's vote, the European Parliament will also have to decide. It will be presented to this body in 5 days, i.e. on October 10th. 

In case of a new agreement, MiCA could start a long process until the final adoption. For now, policymakers are aiming for publication in the Official Journal in the spring of 2023. The law could then come into force within 12 to 18 months.

As a reminder, the MiCA text proposes regulation of crypto-asset providers. If the text has long ignored stablecoins, these are ubiquitous in the final version of the text. A final version that leaked a few weeks ago. 

On this subject of stablecoins, it would seem that the episode of the collapse of Terra and its LUNA and UST tokens had a considerable impact on the legislature. If there have long been talks of limiting exchanges around all stablecoins, the final text seems to be confined to stablecoins denominated in euros.

The United States is following MiCA closely!

If we often consider the United States as a precursor state, there are certain areas such as law where the country of Uncle Sam would be more of a follower than a leader. An element that is widely documented today is the “ Brussels effect ”. Concretely, the Brussels effect breaks down into three stages:

1. The establishment of a European directive
2. The transition from a (non-binding) directive to a regulation
3. Worldwide adoption

If the American legislator will obviously be sensitive to the concrete implementation of the MiCA measures, he does not forget to equip himself with his own framework. Last month, the White House released its first regulatory framework for crypto assets. 

A publication that came after the signing of a decree by President Biden. An order whose stated objective was “to ensure responsible development of digital assets”. This text questions several central themes around digital assets such as consumer protection, the fight against illicit financing, or the strengthening of American leadership. 

Across the Atlantic, we are also working to promote synergies between the various players involved in regulating this market.

What impact on the crypto market?

For the time being, it is difficult to measure the impact that this text could have on the crypto market. In recent months, the regulatory spectrum has been able to play time and time again in the digital asset market. If market players have long considered regulation as harmful to the development of the sector, some are now reviewing their copies.

This is particularly the case with players like the Binance platform, which has long taken refuge behind its desire for a decentralized system that is as pure as possible. 

Without a head office, the firm born in China has long been disinterested in the demands of the various regulators. It now seems that this phase is over. For others, the sector is now mature enough to be subject to regulation.