EU-wide regulation decided
The Markets in Crypto-Assets (MiCA) is a done deal. With it, the EU is creating a uniform regulation for the crypto market. On the night of 30 January, a law was agreed to enable the tracking of crypto transfers. With the MiCA regulation, exchanges and crypto service providers now face some new challenges. In future, they will have to determine information about the sender and recipient when they process transactions, whereby the amount transferred is irrelevant. In addition, there is a duty to cooperate with authorities if they are investigating suspicions of money laundering or terrorism.
The EU is thus putting the focus where the exchange between fiat and crypto-money takes place. Transfers between holders of platform-independent crypto wallets are not taken into account. In the case of transactions with crypto platforms such as Coinbase, Crypto.com or Binance and independent wallets, the information obligation only takes effect for amounts of €1,000 or more.
USDT aftershock
MiCA primarily wants to combat money laundering through cryptocurrencies. In addition, it wants to avoid the Tether fiasco in the future: Stablecoin providers USDT, but also USDC, will in future be obliged to have sufficient reserves to withstand large onslaughts.
In addition, there will be a kind of “environmental statement”: The environmental footprint of cryptocurrencies is finding its way into everyday business. Crypto companies have to declare their energy consumption as well as the environmental impact of their assets on the environment. This initially brought back the fear of a bitcoin ban; however, the feared PoW and bitcoin ban is off the table.
Meanwhile, the future regulation of NFTs is uncertain. They are not yet covered by the MiCA regulation, but postponed is not canceled: A decision is to be made within the next one and a half years as to whether a readjustment is necessary.
Reactions
MEP Martin Schirdewan of the Left Party welcomed the agreement: “As with traditional bank transfers, it must be clearly traceable who is actually the sender and recipient of the crypto assets.”
One of Germany’s leading blockchain experts, Philipp Sandner, on the other hand, expressed relief that “the hard wishes of the European Parliament” had been weakened. These include that the identification requirement only applies to sums over 1,000 euros.
Robert Kopitsch from the Blockchain for Europe association said in an interview with BTC-ECHO: “We are glad that we will soon have legal certainty with regard to important aspects in the area of crypto assets. There are clear definitions, well-versed CASP rules, a sensible supervisory regime and an implementation timetable.”
Role model
Despite all the uncertainty, an EU-wide uniform regulation also creates the basis for a safer crypto market overall, as loopholes in the form of country-specific regulations or, in some cases, lawless spaces will be closed in the future. This creates confidence for a broader acceptance and the courage to invest in cryptos on a broader social level. It is more than likely that with the USA, the North American region will soon follow.