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- 1 MiCA is officially published in OJEU, expected to be effective from December 30, 2024.
- 2 IOSCO is planning for global crypto regulations.
E.U.’s Market in Crypto Assets (MiCA) legislation on June 9 was published in the Official Journal of the European Union (OJEU). It was first introduced in September 2020 to make E.U. a pioneer jurisdiction in providing a comprehensive regulatory framework for the crypto industry.
It was signed into law on May 31, 2023, and is now officially published in the journal. Finally, it’s inching closer to the final effective date of December 30, 2024.
MiCA Entered the Official Journal
The rules mentioned in the legislation would take effect after 20 days of publication. But shall finally be applied from December 30, 2024. Also, a select part of the rulebook would come into effect six months prior, on June 30, 2024. Meaning there will be a sequential application of said set of rules.
The crypto industry and its proponents are welcoming the legislation as it will provide a comprehensive regulatory framework across Europe. The key components include registrations and authorization requirements for crypto asset service providers (CASPs) and an intensive focus on customer protection.
The crypto industry requires specific regulations now more than ever. Events like the collapse of Terra Ecosystem, the FTX-saga, Three Arrows Capital (3AC), and many more rattled the industry. The after-effects of 2022’s harsh crypto winter inadvertently froze the investors’ confidence in the industry.
Almost every major jurisdiction is trying to come up with all-inclusive crypto regulations. Also, the International Organization for Securities Commission (IOSCO) is working on global crypto regulations for digital assets. IOSCO proposed 18 new measures for global regulations.
MiCA will soon come into effect in December 2024 and immensely benefit the entire crypto industry. But it has been showing results even before that. The Venture Capital (V.C.) investments showed a mediocre hike of 5.9% in Q1 2022 and jumped 47.6% in Q1 2023.
The MiCA effect 🇪🇺🚀
— Patrick Hansen (@paddi_hansen) May 9, 2023
The share of VC investment into European crypto projects is up almost 10x in one year – from a share of 5.9% in Q1 2022 to 47.6% in Q2 2023.
Regulatory clarity attracts capital & entrepreneurs from around the world. Great development for crypto in Europe! pic.twitter.com/kUVp3rwlg3
Steps Towards Global Crypto Regulations
Consider a scenario where almost every jurisdiction has its crypto regulations. As the crypto industry is global, it might need help to provide uniform services to everyone. Also, smaller countries that do not have a regulating body could suffer in case of a bad event.
Primarily, the industry has to follow Anti Money Laundering (AML) laws in the country of operation. Investors’ protections and engaging in other unlawful activities are hardly addressed in smaller countries. Also, different jurisdictions treat crypto differently. Hence the industry is calling for global uniform crypto regulations.
IOSCO’s crypto legislation’s proposed eighteen rules address these six key areas.
- Regulatory Cooperation and Cross-border Risks.
- Custody and Client Asset Protection.
- Conflict of Interest arising from the vertical integration of activities and function.
- Retail access, distribution, and suitability.
- Market manipulation, fraud, and insider trading.
- Operational and technological risks.
IOSCO argued that the industry could be recovered in the presence of a global set of regulations. Con artists and bad actors could exploit the existing loopholes and enjoy ill gains. The draft asks for cooperation from 130 international members on the matter. Moreover, the official document is expected to be circulated among them by the end of 2023.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
