In a compelling turn of events, the recent $4.3-billion settlement between Binance and U.S. authorities has reignited discussions on the necessity of the European Union’s Markets in Crypto-Assets (MiCA) legislation. Ivan Keller, a policy officer for the European Commission, provided crucial insights during an interview at the MoneyLIVE conference in Amsterdam.
The urgency of MiCA’s implementation becomes apparent in the wake of FTX’s collapse in 2022 and Binance’s high-profile settlement with the U.S. Department of Justice (DOJ). Keller, addressing the conference, noted,
I think we’ve had several unfortunate confirmations that kind of go down that path of robust regulation. FTX was definitely one of the big ones, and now recently with Binance.
MiCA, hailed as one of the world’s first comprehensive cryptocurrency legal frameworks, aims to provide regulators with clearer levers and powers to supervise entities effectively and mitigate risks. Keller emphasized that the regulation’s goal is to promote innovation while addressing risks to consumers, market integrity, financial stability, and monetary sovereignty.
The timeline for MiCA’s full application across the European Union is taking shape. Enacted in June 2023, the rules governing “asset-referenced tokens” and “e-money tokens,” primarily covering stablecoins, are expected to take effect in June 2024. Subsequently, rules for “crypto-asset service providers,” including trading platforms, wallet providers, and cryptocurrency exchanges and services, will be enforced in December 2024.
Providing an overview of the implementation process, Keller revealed that the European Securities and Markets Authority and European Banking Authority are drafting around 40 technical standards. These standards, covering a wide range of considerations, are subject to public consultation, with the finalized drafts to be presented to the commission.
Keller outlined the scrutiny process, stating, “Co-legislators, parliament, and the European Council will have a scrutiny period of two months. Hopefully, that will be finished before MiCA ‘level one,’ which is this phase for stablecoins, kicks into effect in June 2024.”
Addressing concerns about the readiness of cryptocurrency service providers, Keller mentioned that they have had ample time to understand and adapt to the expectations laid out in the MiCA consultation process. He highlighted the inclusion of a “grandfathering clause,” allowing Crypto Asset Service Providers (CASPs) to continue operating under applicable national rules for a supplemental period. However, these operators would not have the privilege of “passporting” services across the European Union.
The European Union (EU) has taken a major step towards regulating cryptocurrencies by introducing the Markets in Crypto-Assets (MiCA) framework. This innovative approach sets a new precedent for governing digital assets worldwide and addresses the continuously changing landscape of cryptocurrencies. While MiCA has extensive coverage, it does not regulate certain assets and activities that fall outside its scope.
