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- 1 Ukraine is set to adopt MiCA Crypto regulations into its legislation formally.
- 2 MiCA in its regulations has 27 regulatory frameworks to be followed by entities across the bloc.
The European Union is now the first major jurisdiction in the world to institute a comprehensive crypto law. European Commission introduced Market in Crypto Assets (MiCA) regulations in 2020. European Parliament recently voted positively on the bill, slated to become law soon. In aligning itself with the EU, Ukraine is set to adopt MiCA regulations into its legal framework.
Ukraine Following EU’s Footsteps
Ukraine was granted European Union candidature status in June 2022 after they recognized considerable efforts made by the ‘Bread Basket of Europe’ to meet the objectives that strengthened its case as an applicant for EU membership.
This adoption would let Ukraine align itself with the EU’s regulatory framework and demonstrate its commitment to nurturing a more secure and unified crypto industry in the bloc.
Deputy Chairman of the Tax Commission of Ukraine, Yaroslav Zheleznyak, stated on his Telegram channels that the agency is working alongside the National Commission for Securities and Stock Market (NKCPFR) and other regulators for the integration of specific provisions of the MiCA into Ukrainian laws.
NKCPFR member, Yourir Boyko, said that if this happens, Ukraine could be the first country in the world to implement crypto regulations into its national legislation legally.
MiCA regulations require crypto businesses to comply with 27 different regulatory frameworks effective across EU member countries. However, lawmakers must still conduct linguistics and legal checks for MiCA. They will publish the bill in the EU’s Journal in June 2023. The main provisions would come into effect around 12 months later.
EU’s Pioneering MiCA Crypto Regulations
On April 20, 2023, the lawmakers in the European Parliament voted 517-38 in favor of MiCA’s new crypto licensing regime with 18 abstentions. MiCA requires crypto wallet providers and exchanges to be licensed for operating across the bloc. Also, stablecoin issuers will be required to maintain a minimum reserve of 1:1.
The European Parliament also voted 529-29 in favor, with 14 abstentions on a separate law concerning the Transfer of Funds regulation. Crypto operators must do a Know Your Customer (KYC) of their customers and keep a record. This is done to prevent money laundering activities & drug and terror funding activities.
The proposed rules would enforce multiple requirements on crypto platforms, traders, and token issuers, concerning transparency, authorization, supervision of transactions, and disclosure. The platforms will have to disclose the risks associated with crypto to their customers. Moreover, new tokens would now be sold under regulations.
Stablecoins, like USDC and Tether, would now be required to maintain sufficient reserves to meet the demands in case of withdrawal influx. Larger stablecoins would be limited to a daily transaction limit of 200 Million Euros or $220 Million.
The regulations grant the European Securities and Markets Authority (ESMA) the power to ban or restrict a crypto platform. This can be done in the event of non-compliance with rules if they fail to protect their investments or if their activities threaten market integrity and financial stability.
MiCA has also addressed environmental concerns and required crypto firms to disclose energy consumption. They would also have to report the impact on the environment caused by their digital assets.
To turn the proposal into a law, it needs to be approved by the parliament and the European Union’s Council, representing the member states of the bloc.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
