The draft law on the regulation of cryptocurrencies in the EU that has hit the Internet contains general rules for the release and circulation of cryptoassets. Legislators paid special attention to stablecoins.
The Draft European Markets for Cryptoasset Act (MiCA) provides legal certainty in relation to cryptoassets – cryptocurrencies, stock tokens and stablecoins, on the same principles as the Markets in Financial Instruments Directive (MiFID) of the European Union – the legal framework for securities markets, investment intermediaries and trading platforms.
Based on the document that got to the Internet, the European Union intends to treat cryptocurrencies in the same way as any other regulated financial instrument. The bill lays out the definition of cryptoassets and a basic set of rules that apply to issuers of these assets and service providers. At the same time, the definition of operators of cryptocurrency services mainly coincides with the definition of virtual asset service providers (VASP) proposed by the FATF.
Regulation is mainly focused on the issuance and circulation of stablecoins in the European Union, which are defined as asset-linked tokens or electronic money tokens. In addition to providing legal certainty for all cryptoassets, another core principle of the proposed regulation is to support innovation.
XReg Consulting Senior Partner Siân Jones commented on the document and noted that among the many regulatory obligations that will be imposed on cryptoasset issuers and service providers in the EU, there will be the need to register as a legal entity, and for service providers – having an office in one from the countries of the block.
“There is no doubt that MiCA will create serious problems for the DeFi industry projects,” Jones said.
Overall, however, regulatory clarity is likely to attract more institutional investment in the cryptocurrency industry.
“The perception of cryptocurrencies will become easier after regulators recognize them as part of the traditional world,” said Jones. “As for the bill, I would say that it will be in favor of banks and traditional investment companies. Traditional operators will have an edge in a number of ways. It is unlikely that the regulators are doing this on purpose, but this is exactly the effect the law will have in the short and medium term. ”
The proposed regulation is laid out in 168 pages and is due to be officially published later this month. However, the bill is unlikely to enter into force until 2022. Typically by the EU, it will directly apply throughout the EEA without the need for national legislation.
Jones concluded by saying that the new rules are likely to spark a restructuring of the cryptocurrency industry in Europe.
“In a sense, the cryptocurrency industry has been in a gray zone for most of the past decade,” she said. “But now we have a very clear set of rules – and we need to follow it or go beyond it.”
We will remind that recently the Executive Vice-President of the European Commission Valdis Dombrovskis said that the European Union plans to issue more stringent laws to regulate stablecoins.
