Speakers at the Paris Blockchain Week 2023 discussed the implications and potential effects of the proposed Markets in Crypto-Assets (MiCA) regulations from the European Union. The 400-page document is scheduled to take effect in 2024.
A panel discussion titled ‘MiCA: How is the EU Regulating Crypto?’ looked at the document in detail. Gundars Ostrovskis, a team leader in the Digital Finance Unit of the European Commission, offered a look into the design of the MiCA regulations. He believes that the legislation will be beneficial for companies and users in the crypto ecosystem:
“It’s intended to strengthen the industry by giving regulatory certainty and protecting customers of the industry while preserving market integrity.”
MiCA has been in development for a few years, with input from numerous countries and industry players. Ostrovskis noted that some states that already have crypto regulations in place will need to make adjustments when the MiCA takes effect.
Janet Ho, head of EU policy at Chainalysis, believes the success of MiCA will depend on how well it is understood and how robustly feedback is given to improve certain parts of the document:
“Legislation is not a static process. There’s not always a perfect piece of regulation. We know there will be reviews and improvements.”
Hubert de Vauplane, partner at law firm Kramer Levin Naftalis & Frankel LLP, was concerned about the impact of MiCA on existing cryptocurrency and Web3 regulations in certain EU countries. He believes that some of these local regulations may be eliminated when MiCA takes effect:
“That means that there is no room for local regulation which is covered by MiCA, particularly for the definition of digital assets.”
Nadia Filali, Caisse des Dépôts Group’s blockchain program’s director, suggested that governments, regulators, and industry members should work together to ensure MiCA is successful. Ostrovskis believes that the EU Commission has struck a good balance between regulatory parameters for certain parts of the crypto ecosystem, while leaving other areas open for development:
“This will provide a sound regulatory framework for many activities in the crypto asset ecosystem while we also have this centralized finance (CeFi) space, which will, to some extent, remain unregulated.”
The European Union’s MiCA regulations are due to be voted on in April of 2023. However, the initial decision was delayed in January of 2023 due to issues with the translation of the document into the 24 official languages of the EU.