EU Parliament Approves MiCA Regulation and Fund Transfer Rules Details:

European Union (EU) lawmakers approved the world’s first comprehensive cryptocurrency regulation law with 517 votes in favor and 38 against.

European Union (EU) lawmakers have approved the world’s first comprehensive cryptocurrency regulation law with 517 votes in favor and 38 against. The EU Parliament’s Markets in Crypto-Assets Regulation (MiCA) introduces a series of requirements for crypto platforms, token issuers, and traders related to transparency, disclosure, authorization, and supervision of transactions. This law creates a legal framework for the export, intermediation, and trading of crypto assets.

“We expect this law to be implemented starting from next year.”

Mairead McGuinness, European Commissioner for financial services

MiCA is being considered as the most comprehensive regulatory framework for digital assets to date.

The approval of MiCA is seen as a significant development for the crypto industry worldwide and puts the EU one step ahead of the US and the UK. The final vote for MiCA will take place on May 16th at the European Council, and the proposal is expected to be approved there as well. MiCA will come into effect for companies issuing stablecoins in June 2024, and for others such as crypto asset service providers, in December of the same year.

MiCA regulates three different types of tokens.

These tokens, as their names suggest, have different purposes. Payment tokens (or cryptocurrency) are used as a means of payment, utility tokens are designed to be used within a specific project or platform. For instance, Ether is a utility token that is used in the internal workings of the Ethereum platform. Investment tokens are used for investment purposes and have financial asset qualities.

MiCA also introduces new terms to the crypto market

MiCA imposes a set of requirements for crypto asset service providers. Crypto asset services include services such as custody, management, buying and selling, offering to the market, listing, receiving and transmitting orders for crypto assets on behalf of third parties.

When authorized by an EU country under MiCA, the authorization will be valid throughout the EU. Crypto asset service providers will need to meet certain requirements to obtain authorization in their country, including capital requirements.

Crypto asset service providers will be subject to the capital requirements determined under MiCA. The capital requirement for services related to custody, management, and administration of crypto assets will start at 125,000 euros. For trading platforms, this requirement will be 150,000 euros. The limit for services related to the execution of orders in crypto assets and investment advice services is set at 50,000 euros.

The rights of crypto investors will be at the forefront!

MiCA also introduces various consumer protection rules to reduce the risks that crypto service providers may be liable for if users lose their crypto assets. These rules impose various obligations on crypto service providers, such as taking sufficient measures to protect customer assets and complying with certain capital requirements. In addition, MiCA also includes disclosure requirements to help consumers better understand the activities of crypto exchanges providing services. All of these rules and regulations aim to make the activities of crypto service providers more transparent and reliable, and to protect investor rights.

In conclusion, MiCA is considered an important step for the global crypto industry. After the implementation of EU laws, crypto companies can use their licenses in a European country to provide their services in EU member states. This could make the EU an important market for the crypto industry.

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