The European Union is set to vote on the Markets in Crypto Assets (MiCA) proposal, aiming to establish a legal framework that will regulate the cryptocurrency industry and rebuild trust after high-profile collapses.
European Union legislators aim to conclude the cryptocurrency industry’s “wild west” phase and rebuild trust with new regulations, following high-profile collapses in the previous year.
The Markets in Crypto Assets (MiCA) proposal is set to be voted on in the European Parliament in Strasbourg, marking a significant milestone in its journey toward becoming law.
E.U. looking for more oversight
Parliament members discussed the merits of MiCA, with many praising the establishment of a legal framework as a significant advancement for the bloc.
Spanish MEP Ernest Urtasun, who contributed to the legislation’s development, stated that MiCA would put an end to the unregulated era of crypto assets.
He emphasized that the absence of regulation over the past decade has led to substantial losses for inexperienced investors and provided a sanctuary for criminals.
German MEP Stefan Berger, the regulation’s lead architect, claimed that MiCA would position the E.U. at the forefront of the token economy and help regain trust damaged by the FTX case.
Financial commissioner Mairead McGuinness also mentioned FTX, suggesting that its practices would not have been permissible under E.U. jurisdiction.
While many parliamentarians supported MiCA, some voiced dissent and concerns. Irish MEP Chris MacManus backed the proposal due to its focus on transparency and consumer protection but expressed his disapproval of cryptocurrencies.
Dutch MEP Paul Tang compared cryptocurrencies to the 1637 tulip craze, an early financial market bubble, but conceded that perhaps cryptocurrencies could achieve cultural significance eventually.
German MEP Gunnar Beck raised objections, accusing the E.U. of criminalizing decentralized finance and its users by mandating more transactions to be reported to relevant authorities. He argued that this would result in a total financial surveillance state.
Several MEPs emphasized the need for the regulation to remain relevant and keep pace with technological advancements. Portugal’s Lídia Pereira stressed the importance of Europe driving the new era, rather than merely catching up.
If approved by parliament, MiCA will receive final endorsement from the European Council in May before being officially published. Stablecoin regulations will take effect in July next year, while other requirements will not be enforced until January 2025, allowing providers more time to adapt.
