MiCA crypto regulation

Best 2 Reasons

The main feature MiCA crypto regulation

The EU Bitcoin and Crypto Asset Regulation, or MiCA, is the latest legislation in this area. This EU initiative harmonizes a fragmented system of digital asset regulation in EU national regulations.

Once MiCA enters into force, the EU-wide regulation of the business will be uniform and clear, making it easier for companies to operate, while improving consumer protection and reducing risks to EU financial stability.

Operating principle of MiCA crypto regulation

MiCA sets uniform release, trade and maintenance rules for digital assets, as well as requirements for service providers. Such business and related services are now equivalent to financial services throughout the EU. In each EU member state, so-called National Competent Authorities, or NCAA, are introduced, that is, the digital business supervisory bodies of the particular EU member state. MiCA also focuses on certain categories of assets that are not covered by existing regulations. It should be noted that MiCA focuses on information related to owners and managers of companies that provide services for the use or maintenance of digital assets. The regulations are aimed at preventing conflict of interest, money laundering and the financing of terrorism through such assets.

Economic implications and impact on bitcoin

The European regulator aims to bring Bitcoin and digital asset ratios closer to the standards of the traditional financial market.

Such initiatives may also lead to more centralization and competition restraint (despite the official pro-competitive stance). Licensing would exclude platforms and companies that would not meet the new requirements.

Moreover, all potential services will be considered in the context of meeting regulator expectations and priorities.

It is obvious that the practice of KYC (English. «know your client» – regulations on the provision of identity documents) and AML (Anti Money Laundering» – Rules to confirm the source of the proceeds and use them to establish that they were not used for criminal purposes) will become more common.

From a user’s perspective, this trend will mean minimizing their privacy and total control over their operations. In addition, government regulation of the technical features of the operation of platforms and companies will allow, if necessary, centralized access to both the database of users and their transactions.

The importance of MiCA crypto regulation