FTX, Celsius, Terra-Luna – 2022 has been more turbulent for the crypto space than it has been in a long time. Calls for more regulation have grown louder – and not just on the official side. In terms of regulation, the focus this year has been primarily on crypto asset markets, or MiCA for short.
Basically, the regulation creates clear rules for the European crypto sector and brings it under the custody of the authorities. In all likelihood, the MiCA will come into force at the beginning of 2023 and will come into force 18 months later. For the end user, the regulation brings greater consumer protection, as crypto providers will only be allowed to operate in the EU with a license in the future. Due to the so-called “passport”, they only need one permit for the entire economic zone.
MiCA road was rocky
It is the first crypto regulation that applies not only in one country but in an entire economic zone.
However, the road to get there was anything but easy. Bitcoin was threatened with extinction in the EU when the Left, Green and Social Democrat parliamentary groups sought to ban crypto services based on “ecologically unsustainable consensus mechanisms”. This would have spelled the death knell for all proof-of-work cryptocurrencies in the EU, experts have warned. After many back and forths, however, things turned out differently. Parliament voted against any ban. In March, the MiCA entered the next phase: the trialogue.
The negotiations with the Commission and the Council ended almost 4 months later. At the end of June, MiCA was finally decided, paving the way for a regulated crypto industry in Europe. A milestone according to the general opinion of the experts.
However, this is not the end of the road. “MiCA is the first step in a long process,” BaFin’s Oliver Fußwinkel explained during a meeting with industry representatives in the Bundestag at the end of September. The open sites are still the NFT and DeFi sector. However, the date when the EU will extend the MiCA to these areas is still up in the air. One thing is certain: 2023 will be an exciting year for the crypto space also – and perhaps especially – from a regulatory point of view.
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