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The European Union Parliament passed a positive verdict for the Market in Crypto assets (MiCA) regulatory framework, approving its official implementation in early 2025.MiCA’s much-needed approval comes after the prominent collapses of big crypto players including FTX, Celsius, and Voyager. The framework ensures the protection of investors from further project failures and has been overwhelmingly accepted in the EU parliament with a <a href="https://www.bnnbloomberg.ca/first-eu-wide-crypto-regulations-clear-final-parliament-vote-1.1910069" rel="noopener noreferrer nofollow">vote</a> of 517 for and only 38 against.<a href="https://twitter.com/McGuinnessEU/status/1648999671644188674" rel="noopener noreferrer nofollow">Mairead McGuinness</a>, the European Commissioner for Financial Stability, Financial Services, and the Capital Markets Union gladly welcomed MiCA as the world’s first comprehensive crypto rulebook to safeguard investors and create a sustainable market.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/755456c427274c42acad68ac29fe4ed2.png" /><h2 id="header-0">MiCA: What It Is And Why It Matters</h2>MiCA, or Market in Cryptoassets, is a new crypto regulation framework which requires crypto asset services providers (CASPs) to gain licenses from legal authorities before entering the EU market.It primarily covers crypto assets that are not currently governed by the existing EU laws. For instance, electronic money tokens or asset-referenced tokens fall under the scope of MiCA.The MiCA will be progressively implemented over the next two years with regulation of stablecoins taking place in July 2024. This will require the crypto providers to have trading caps on non-euro-denominated tokens not backed by fiat currency, and also maintain fund reserves. The broader MiCA rules governing these crypto platforms will come into effect by early 2025.The European Banking Authority and the European Securities and Markets Authority will be responsible for ensuring compliance by the crypto platforms. They will also look into certain MiCA guidelines before its final implementation.The rules have been developed for three years as an alternative to the US approach of regulating through enforcement which has been making companies like <a href="https://blockworks.co/news/bittrex-us-shutdown" rel="noopener noreferrer nofollow">Bittrex</a> move out of the state.However, the EU’s decision is being considered to bring a new era in the development of cryptocurrency regulations. For instance, investors can opt for MiCA-approved crypto platforms over others to ensure financial security. This will also attract more crypto service providers to build in the EU market.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/439576063f13480d8f582beeb7c03f6a.png" /><h2 id="header-1">What&#39;s In The Future With MiCA?</h2>The approval of MiCA as the first regulatory guideline is expected to raise the bar of crypto legislation worldwide. It will also encourage crypto adoption as more consumers can invest in crypto platforms approved by legal authorities.The “travel rule” used in traditional finance will now also apply to crypto where the exchanges have to provide the sender and recipient information for transactions to authorities. This will also be applicable for transfers above €1,000 from self-hosted wallets.Taking about the MiCA implementation, Binance CEO Changpeng Zhao earlier <a href="https://twitter.com/cz_binance/status/1649018863298703361?ref_src&#61;twsrc%5Etfw" rel="noopener noreferrer nofollow">tweeted</a>,“The European Parliament voted for MiCA to be implemented.This means one of the world’s largest markets is introducing tailored regulations for crypto to protect users and support innovation.The fine details will matter, but overall we think this is a pragmatic solution to the challenges we collectively face. There are now clear rules of the game for crypto exchanges to operate in the EU. We’re ready to make adjustments to our business over the next 12-18 months to be in a position of full compliance.”As of now, crypto lending, NFTs and DeFi are not included in the legislation which still keeps scope for improvement in the current set of laws.But even then, MiCA comes as the first step towards a larger global crypto adoption and regulation fostering innovation in this space.<h2 id="header-2">FAQs:</h2>1- What is the MiCA rule in crypto?MiCA, or Market in Cryptoassets, is a new crypto regulation framework which requires crypto asset services providers (CASPs) to gain licenses from legal authorities before entering the EU market.2- Has MiCA been passed?The European Union Parliament passed a positive verdict for the MiCA crypto regulatory framework, approving its official implementation by early 2025.3- Is Bitcoin covered by MiCA?MiCA covers crypto assets which are not already governed by existing EU regulations, for instance, e-money tokens or asset-referenced tokens.4- Is the EU directive for Blockchain?The EU is building an EU-wide blockchain regulatory framework to ensure uniformity in legislation and to protect consumers while fostering innovation in this space.5- Is the EU making Bitcoin traceable?The EU travel rule that is set to be implemented in the crypto will ensure that all transactions become traceable and the CASPs can detect and prevent sanctioned transfers.

EU’s Parliament Approves MiCA Framework For Crypto Regulation

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Kryptos

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