European Market Watchdog Advises Crypto Firms To Prepare For Rules

On October 17, Bloomberg reported that the European Securities and Markets Authority has urged crypto firms and national regulators to be prepared for the new European Union’s new industry regulations instead of depending on an extended transitional period.

Moreover, the Authority emphasized the importance for digital asset companies to promptly seek authorization from national regulatory authorities within the framework of the European Union’s forthcoming Markets in Cryptoassets (MiCA) regulations while encouraging discussions around how the upcoming rules will potentially affect the firms’ existing operations.

A press release from May noted that MiCA is set to bring about a significant transformation in the crypto industry. Endorsed by EU lawmakers, earlier this year, MiCA stated that crypto service providers, intending to operate within the EU, must undergo registration with a regulatory authority in at least one member state. The implementation of the regulation is scheduled for January 2025.

This provision enables companies that have registered before the specified date to continue their operations during an 18-month transition period, effectively extending the implementation until the middle of 2026. Bloomberg further highlighted that the regulatory authority stated that it is “probable that a significant number” of crypto firms already catering to EU clients will attempt to utilize this provision. This includes certain providers that leverage their significant scale to operate across borders and exploit regulatory variances between more accommodating jurisdictions.

MiCA’s regulations are already having a substantial impact on the leading crypto exchange, Binance. In September, a report unveiled that a Binance executive had issued a warning regarding the possible removal of stablecoins from the European market, in accordance with MiCA. In the report, Marina Parthuisot, Head of Legal at Binance France, was quoted as saying that no stablecoin project has yet received approval under MiCA.

Marina Parthuisot, Binance’s French legal director, said that since the MiCA bill that will take effect in June 2024 has not yet approved any stablecoins, Binance plans to delist all stablecoins in Europe on June 30, 2024. CoinDesk https://t.co/PDEKnZegE9

— Wu Blockchain (@WuBlockchain) September 21, 2023

Despite the EU’s efforts and the introduction of MiCA, the union failed to position itself within the top 20 in the 2023 Global Crypto Adoption Index. The index, released by crypto intelligence firm Chainalysis, revealed that Central and South Asia claimed the highest spot in terms of crypto adoption.

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