The MiCA Law, intended to regulate the cryptocurrency market in the EU, has been ratified. This regulation could have significant implications for institutional investment and financial privacy.
The MiCA Law, a pioneering regulation in the cryptocurrency market, has been ratified by European officials. This law first launched in 2020, aims to regulate the cryptocurrency market in the European Union (EU).
The path seems completely paved for this regulation to definitively become an applied law within a period of approximately one year.
Ratification of the MiCA Law: A Step Towards Transparency
It is worth remembering that the Mi]CA Law tries to shape a regulatory framework that harmonizes and integrates the legislation in all the Member States of the European Union, which until recently established their own rules to contain the popularity of Bitcoin and other digital currencies. In particular, the European framework seeks to regulate the issuance, offer to the public, and trading of crypto assets, which it provides with a common and specific definition.
Officials signed the law after finance ministers recently ratified it. This Wednesday, the Swedish Minister for Rural Affairs, Peter Kullgren, and the President of the European Parliament, Roberta Metsola, gave their approval. This ends the long wait of three years since the draft was introduced by the Commission.
On Twitter, the announcement read as follows:
“Facilitated trade for Ukrainian products, and stronger rules to prevent financial crime through crypto-assets – this will be the effect of two of the new EU laws negotiated under #EU2023SE.
Signed by @peterkullgren and @EP_President_ today, they now enter into force.”
The MiCA Law: An Example for the USA
Now that EU officials ratify the MiCA Law as a regulatory framework for the crypto market, expectations are set in the United States. Washington would be working on its own regulation for the sector. However, those rumors do not have a solid foundation so far.
Although regulations such as the MiCA Law and those that may be adopted in the United States have negative elements, there are also positive sides. Among the latter is the stimulus for large institutional investors, which guarantees the increase in the capitalization of dozens of assets.
Experts highlight that, although the regulation has an adequate approach, the action should be coordinated at a global level by organizations such as the G20. Maria Demertzis, a researcher at the Bruegel think tank, points out the following:
“The defining characteristic of decentralized finance is that it has no borders and is therefore accessible to many. For the industry to experiment with ways to divide and spread risk is dangerous. And the more popular cryptocurrencies become, the greater the risk of something going wrong and causing a global upheaval.”
On the negative side is the limitation on financial privacy. In fact, the MiCA Law could prohibit centralized exchanges from receiving cryptocurrencies from non-custodial wallets. In the midst of this scenario, EU officials ratify the MiCA law and the implications will begin to be seen within a period of approximately one year when it begins to be applied effectively.
By Audy Castaneda
