The European Parliament passed the landmark “Encrypted Asset Market Supervision Act (MiCA)”, paving the way for a European-wide cryptocurrency regulatory path, and also made the EU run ahead of the United Kingdom and the United States, becoming the first country to comprehensively introduce a regulatory framework for encrypted assets Primary Jurisdiction.
EU lawmakers passed the bill on April 20 with 517 votes in favor, 38 against and 18 abstentions, heralding the coming era of unified regulation of the crypto asset market in Europe. Since MiCA is a “Regulation” at the EU legislative level and has direct legal effect on EU member states, it will replace all regulations on encrypted assets within EU member states.
The vote follows Wednesday’s debate, in which EU lawmakers advocated for the introduction of a licensing regime for wallet providers and exchanges, and required stablecoin issuers to maintain sufficient reserves.
Effective as soon as 2024
The Encrypted Asset Market Supervision Act (MiCA) was first proposed by the European Commission in 2020. Although it has been passed by the European Parliament, it still needs to be approved by the European Council before it can officially become EU law.
The main provisions of this bill will be published in the Official Journal of the European Union. The regulations on stablecoins will come into force as early as July 2024, while other regulations will not be on the road until January 2025.
In a Twitter post , Mairead McGuinness, the EU’s financial stability commissioner, described MiCA as “the world’s first comprehensive regulatory framework for cryptoassets.” she says:
We are protecting consumers and preserving financial stability and market integrity. Relevant regulations will come into effect next year.
In a statement released by the European Parliament , lawmaker Stefan Berger, who led negotiations on the law, said the rules would put the EU “at the forefront of the token economy.” He pointed out:
The European regulatory clarity on the cryptoasset industry is non-existent in countries such as the United States, and an industry damaged by the FTX crash can now regain trust.
In addition, the European Parliament voted 529 to 29 with 14 abstentions on Thursday to pass another separate law called the Funds Transfer Regulation (TFR), which requires cryptocurrency operators, wallet providers to check Customer identity to reduce money laundering.