MiCA Begins in the European Union

Markets in Crypto-Assets Regulation (MiCA) has entered its final stretch in the European Union.

{getToc} $title={Table of Contents}

Entrance

The Markets in Crypto-Assets Regulation (MiCA) was approved as a regulation by the European Parliament on April 20, 2023, and by the Economic and Financial Affairs Council of the European Union on May 16, 2023. It was stated that this regulation was designed to ensure transparency and security in the field of cryptocurrencies in the European Union.

MiCA

The regulation became law in June 2023. Draft sub-regulations were prepared by the European Securities and Markets Authority (ESMA) in cooperation with the European Banking Authority (EBA) for a period of 1 year, that is, until June 2024. Central Cryptocurrency Exchanges (CEX) operating in the European Union region were informed that the MiCA regulation would come into full force by December 2024, and CEX exchanges have started the compliance process within the scope of this regulation.

MiCA Pros and Cons

What could happen with the MiCA regulation in the European Union? What would be the pros and cons of this regulation for the cryptocurrency market? Now let's look for answers to these questions.

Pros

Cryptocurrency exchanges operating in the European Union region have been included within the MiCA framework and have come under EU control.

With this law, cryptocurrencies are officially accepted by the European Union.

Stable Coins are accepted as cryptocurrencies.

MiCA Cryptocurrency exchanges in EU countries must have an office and at least one director residing in the EU country. They will be required to implement anti-money laundering (AML), continuity of services and data security policies and procedures. They will ensure compliance with marketing communication rules and prevention of market abuse. It is aimed to share pricing, cost and fee policies for cryptocurrencies with the public in a transparent manner.

Cons

With MiCA, cryptocurrency exchanges and investors are restricted to some extent, which draws a reaction from crypto investors. Considering that the world economy is in a very fragile structure, it is thought that this regulation is aimed at protecting the economy of the European Union rather than crypto investors.

With the MiCA regulations, there has been pressure on cryptocurrency exchanges and advertising partnerships. It is stated that this pressure will prevent the growth and development of the cryptocurrency market. Similar practices were made with the crypto law passed in the Republic of Turkey in the past months and attracted the reaction of many investors.

With the MiCA regulation, algorithmic stable coins are banned. Other stable coins are faced with harsh sanctions. Stable coins that do not comply with these rules will be delisted from the relevant EU regional exchanges and will not be allowed to be used.

Conclusion

The conclusion we draw from these regulations is that the European Union, like many capitalist countries in the world, sees the rise of the cryptocurrency market as a threat to the EU economy. The Bitcoin revolution, which appears as a rebellion against the world economy system with dollar and gold reserves, is being tried to be controlled with these and similar regulations.