The European Union’s Economic and Financial Affairs Council, which comprises finance ministers from all 27 member nations, passed the long-awaited Markets in Crypto-Assets (MiCA) bill on May 16. In addition to MiCA, the European Parliament adopted two additional pieces of legislation, including disclosure limits on cash and some crypto assets transactions.
On April 20, the European Parliament formally approved the MiCA Act, paving the way for final approval by the European Council before the regulatory parameters take effect. The legislation in the European Union defines defined legal norms and restrictions for the usage of cryptocurrencies, as well as associated services and activities. The scope of the Act encompasses cryptocurrencies, digital assets, utility tokens, and stablecoins.
The measure would now be published in the Official Journal of the European Union as the next stage in the lengthy process of becoming EU law. MiCA will go into effect in a year, which means the regulations will become law in the middle of 2024. MiCA was initially suggested by the European Commission in September 2020, but it has encountered various roadblocks and delays on its route through the legislative process.
The law has been warmly welcomed by Bitcoin service providers and supporters alike since it establishes a unified market environment in terms of legal standards and operating processes across Europe. Registration and authorization requirements for cryptocurrency issuers, exchanges, and wallet providers are key components of MiCA law.
However ,certain security and risk mitigation standards must be met by Stablecoin issuers, while cryptocurrency custody providers must offer adequate security and safety procedures to handle any cyber security and operational failures. In addition, the Act establishes a framework for preventing market manipulation, insider trading, and manipulative behavior in the Bitcoin field.
