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Highlights
- EU Council approved and finalised the MiCA text on 5 October.
- The EU Council's on Friday confirmed that its representatives are now moving forward with regulating crypto assets.
The European Union, last month, on 20 September, had reportedly finalised the text of its landmark Markets in Crypto Assets (MiCA) bill. But now, two weeks later, EU Council approved and finalised the MiCA text on 5 October. The committee will now meet on 10 October for further deliberations.
The EU Council's on Friday confirmed that its representatives are now moving forward with regulating crypto assets in the region. According to the EU General Secretariat document, the committee members approved the MiCA text and sent it to the European Parliament Committee for further deliberations.
The document, signed by Edita Hrda, chair of the Permanent Representatives Committee, revealed that the crypto framework proposal would be ratified after its first reading at the Parliament.
Why is MiCA Bill necessary?
The MiCA bill is critical as it may well be the first form of crypto regulation to be set in place. Though it will still have to undergo the process of clearance from various committees, it may very well provide incentive to others to follow a similar format to form crypto regulations in their country. Once the Parliamentary Committee approves the text, the rules will come to force in 2024.
Since September 2020, when the MiCA bill was introduced, the bill has already undergone several voting and revisions, primarily aimed at creating a consistent regulatory framework for cryptocurrencies among EU member countries.
The most recent MiCA text questions the lack of oversight on crypto assets. It sheds light on the need to ensure that the region's legislation builds a future-ready economy that works for all. Several sceptics have already started questioning the legality of the MiCA text, stating that it may very well hamper innovation and affect crypto adoption.
Changes which may come to force
If implemented, besides the crypto assets, the MiCA bill would also bring a more stringent oversight to crypto-asset service providers (CASPs). These asset providers would come under the new rules and fall under the legal liability to recover clients' cryptoassets.
The rule covers all crypto firms, such as wallet providers of various custodial wallets, but not those of unhosted wallets.
Thus, Monday's reading makes it an important landmark as it would give us a hint as to where the crypto economy is headed and what will be the fall of the fragile crypto market.
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