While some industry watchdogs are unsure the EU’s Markets in Crypto Assets Regulation (MiCA) will be able to provide clear, unified guidelines, it could prove transformative according to experts quoted by CoinDesk.
The regulation would require crypto companies to provide investors with fair, clear information, register with the authorities, and dispose of sufficient capital backing stablecoins. The text has been nearly finalized.
A single framework
The creators of the law claim it will establish a single framework for firms to operate across the EU and its 500 million consumers. Legislator Stefan Berger, who negotiated the regulation for the European Parliament, wrote to CoinDesk, “Legal certainty was one of the main reasons why we need MiCA.
“We now have a legal framework that can be relied on as an investor but also as an issuer and offeror … order is created in the Wild West of the crypto world.”
A drastic change
European Crypto Initiative executive Marina Markezic agrees with his positive view. She termed the new regulation “a drastic change” from the current situation, saying that once MiCA was adopted, the crypto user community would have to take legal compliance into account in their operations and projects.
When one looks beneath the surface, they see many unresolved details. The new law might be a boon for wallet providers and similar crypto services, but legislators have not accomplished their goal for legal clarity across the board, especially in more innovative aspects of Web3 technology.
Conflict on NFTs
EU governments wanted to exempt NFTs from the law entirely, but legislators of the European Parliament claim a lot of purported NFTs on the market are actually traded just like financial products and capable of similar incidences of market abuse and mis-selling.
In practice, most NFTs will fall within the scope of the law, because according to the current legal compromise, regulators will consider any assets issued as part of a series fungible. What’s worse, separate countries might assume inconsistent positions on whether a white paper must be issued for a specific asset.
Caps on non-euro stablecoin use
The final version of the text found more support in other areas, like putting a limit on the utilization of non-euro stablecoins.