EU Approves Markets in Crypto Asset Regulation (MiCA)

The European Union has agreed on the legal text for licensed crypto firms, by passing the landmark Markets in Crypto Asset regulation (MiCA).

The legislation will now need to pass through a further vote in the European Parliament next week and if approved, the laws under MiCA would commence at the start of 2024. The scope of MiCA covers issuers of unbacked crypto assets, stablecoins, trading venues, and wallets alongside rules to reveal the identity of persons transacting cryptocurrencies. 

In June 2022, the European Council and European Parliament reached a provisional agreement on MiCA, marking the first comprehensive EU stance on cryptocurrencies. Back in June, The move came a day after the European Council, European Parliament, and The European Securities and Markets Authority (ESMA) finalised measures aimed at decreasing money laundering in crypto. 

Under the regulation, stablecoins like tether and Circle's USDC will be required to maintain ample reserves to meet redemption requests in the event of mass withdrawals. Stablecoins that become too large also face being limited to EUR 200 million in transactions per day.

(Source: The Paypers)