EU Parliament Ratifies New Framework To Regulate Crypto Space: Here’s What To Expect

The increasing popularity of digital assets among ordinary and institutional investors has made it necessary for governments worldwide to create regulations to boost the benefits and curb the threats of cryptocurrencies. The approach toward digital currencies is varied. At one end, the Salvadoran government passed a law that made Bitcoin legal tender. In contrast, China led a massive crackdown on bitcoin trading and mining at the other end. In-between, other countries have taken a more measured approach to the crypto phenomenon. The U.S. government recently signaled its intention to streamline and centralize the development of regulations to govern its crypto space. However, the European Union (EU) is already leagues ahead of the United States concerning crypto laws. The EU’s Stance on The Crypto Market In March 2022, as part of its Digital Finance Strategy, the EU passed a slew of regulations dubbed “Markets in Crypto Assets” (MiCA) to support the development of crypto technologies and protect its users. Interestingly, MiCA does not apply to distributed ledger technologies such as blockchain. It also does not apply to central bank digital currencies (CBDC), which are virtual currencies issued by governments and regulated by their respective central banks. Decentralized finance (DeFi) protocols are also still outside the remit of the new regulation. In this short guide, we will look at some of the possible effects of the MiCA ...