![]() ![]() In May 2020, only 35 countries were considering a CBDC. More details hereĪt the beginning of 2023, 114 countries, representing over 95 percent of global GDP, are exploring a Central Bank Digital Currency, according to Atlantic Council – CBDC Tracker. Until then, crypto service providers have the opportunity to prepare for this new crypto legislation. The revised texts will therefore not apply before 2024. MiCA will come into effect 18 months after the approval date – likely early 2023. Now that the main aspects of MiCA have been agreed, the regulation still needs to be finally approved by the Commission and the European Parliament. A report with possible new legislative proposals will be submitted no later than 18 months after the entry into force of the regulation. However, a reclassification for NFTs is always possible if they qualify as a financial instrument or a crypto-asset.ĭecentralised financing (DeFi) and crypto lending are not (yet) addressed in MiCA. ![]() Non fungible tokens (NFTs: digital objects held by an internet user) will be exempt from MiCA. Instead, it instructs the European Commission to prepare a report on the environmental impact of crypto assets and to introduce a mandatory minimum sustainability standard for such consensus mechanisms as PoW. ![]() It will apply to crypto assets that are not currently regulated by existing financial services legislation, such as the Markets in Financial Instruments Directive (MiFID).Īlthough Proof-of-Work cryptocurrencies (PoW) – such as ‘Bitcoin’ – are notorious for their huge energy consumption, MiCA is not issuing a ban on crypto currencies that use the PoW algorithm. MiCA is part of the ‘EU digital finance package’ that aims to support the future potential of digital finance in terms of innovation and competition while mitigating the risks entailed. Parties will have to comply with certain legal obligations and may need a licence. MiCA is expected to have a huge impact on providers of crypto asset services in the European Union (EU) – as well as providers based outside the EU – and financial institutions due to the opportunities it will create for banks, investment firms and insurance companies. The European Parliament and European Council have reached a provisional agreement on a first draft of the long-awaited Markets in Crypto Assets (MiCA) regulation. While it’s not expected to come into force until early 2024, MiCA aims to protect consumers and investors, and increase financial stability within the market, while at the same time not hampering innovation within the crypto and Web3 space. The EU aims to use MiCA to become an attractive place for crypto-asset service providers (CASPs) to do business globally, while preventing market abuse and protecting consumers from fraud, money laundering, terrorist financing, and other criminal activities. This means that crypto-assets, crypto-assets issuers, and crypto-asset service providers (CASPs) will be brought under a regulatory framework for the first time. In October 2022, the European Council finally settled the approved text for the Markets in Crypto-Assets (MiCA) Regulation, making it one of the first attempts at regulating cryptocurrency markets. This could have been prevented and avoided by proper regulation. In 2022, the contagion from Terra/LUNA, Three Arrows Capital, Celsius, and FTX/Alameda wiped out ~$1.5 Trillion in crypto market capitalization. ![]()
0 Comments
Leave a Reply. |