The EU Parliament passed the Markets in Crypto Act, or MiCA, on Thursday which will come into force next year and has been hailed as a “landmark moment” for cryptocurrencies that will “help drive prices” for the likes of Bitcoin.
Stefan Berger, the MEP who led the bill’s creation, said in an emailed statement that Europe is now the “first continent with comprehensive regulation for crypto assets.”
“In order for new coins to be approved in the EU, it must be ensured in future that their business model will not endanger our currency stability,” he said.
“The new supervisory structures will also be a bulwark against Lehman Brothers moments like the crypto exchange FTX.”
The MiCA legislation means that the EU will have a unified approach to crypto asset regulation across all 27 member states, including Cyprus, meaning firms approved in one country can “passport” their operations into others.
“This is a landmark moment for crypto. It signals the maturing of the market and underscores that cryptocurrencies are now mainstream,” said Nigel Green, the CEO of deVere Group, a leading independent financial advisory and fintech.
“Crypto has now come of age in Europe as it is being brought into the regulatory tent and being held to the same standards as the rest of the financial system.”
Green has long been campaigning for regulation of the cryptocurrency market since he launched the deVere Crypto exchange in 2018.
“We’ve been lobbying authorities on this issue as greater regulatory scrutiny is needed as digital currencies, including Bitcoin and Ether, are set to play an ever-greater role in the international financial system.
“We’ve been pushing for a strong regulatory framework to be established and approved at an international level.
“As such, we’re thrilled that the EU, the world’s largest trading bloc, voted 517 to 38 in favour of the Markets in Crypto Act, or MiCA, as it seeks to reduce risks for consumers buying crypto assets, meaning providers can become liable if they lose investors’ crypto assets.”
The deVere CEO said that with clear and consistent legislation in place, investors will have “more confidence in the market and feel more secure” in their investments.
“This will further attract more institutional investors who bring with them huge levels of capital, experience and influence, which can help increase demand and drive up prices in the long-term.”
The regulation will help reduce fraudulent activities in the market, serving to “improve the wider reputation of the industry and increase mass adoption” which will also maintain crypto prices on an upward trajectory.
Ahead of US-UK
The move puts the EU ahead of the US and UK, which are yet to bring in legislation for the crypto market. However, a UK official on Monday said regulation could be implemented within a year.
Green said the US and UK now have the opportunity to catch up with the EU on crypto regulation, which they inevitably will do – and probably sooner than many expect.
“Again, this must be welcomed as it will protect investors, tackle crypto criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those jurisdictions which introduce it.”
He concluded that digital is the inevitable future of finance.
“Therefore, the proactive, forward-thinking work being done by central banks and governments, among others, in this area must be championed.”