European Union (EU) Agrees on MiCA Crypto Law Text

Paigambar Mohan Raj
Source: Blockworks

A significant step in European crypto laws and regulations as diplomats representing the European Union (EU) held a meeting today to finalize the continent’s Markets in Crypto Assets Regulation (MiCA) law. The EU has agreed to the text of the legislation, giving way to cryptocurrency laws moving closer to being implemented in the continent.

The EU also agreed on an additional law to identify people making cryptocurrency payments. Officials and politicians have been working to create a final legislative language from the two political outlines that were agreed upon in June. The law received the seal of approval from EU diplomats in the Wednesday meeting.

MiCA makes way for the first-ever licensing program for cryptocurrency wallets and exchanges in Europe. Additionally, the law imposes reserve requirements for stablecoins. The reserve law is an attempt to avoid a Terra-like collapse, which shook the entire industry in May. Even Binance chief, Changpeng Zhao, called the EU stablecoin rules as being “strict.”

Furthermore, industry lobbyists hoped to clarify MiCA provisions, worried about restrictions on the trade of stablecoins pegged to the dollar. However, it appears that the softer legal language that leaked two weeks ago was rejected by nations like France, which are anxious to prevent intrusion into the sovereign role of the Euro.

When will the Crypto laws come into effect?

The agreement by the diplomats is not the final step for the MiCA law. The text must also be legally approved by members of the European Parliament. The Law is anticipated to be gazetted in the journal of the EU early next year. If everything goes according to plan, the MiCA laws could be implemented by 2024.

The implementation of the MiCA will be a significant step in crypto regulations. Many sovereign countries will look to the EU to draft their own cryptocurrency regulatory rules. Furthermore, the EU is one of the largest financial centers. Hence a crypto regulatory framework in the continent will surely inspire others to look in the same direction.