Hey there!
How is your week going?
Have you heard about the latest news in the world of cryptocurrency? The European Parliament just passed a law called Markets in Crypto-Assets, or MiCA for short, which gives regulators sweeping powers to regulate the cryptocurrency industry. This move aims to prevent money laundering, improve supervision and consumer protection, and make the industry safer for everyone involved.
Starting in 2024, MiCA rules will be rolled out in phases and represent the most significant attempt by global governments to regulate the growing market for digital assets. In fact, the EU hopes that the new law will set a "global standard" for other jurisdictions to follow.
Unlike the US, which has yet to implement significant cryptocurrency regulations, MiCA is a step forward on the regulatory front. This new law will help prevent illicit financing activity in the decentralized finance industry, and customers will be better informed of the "risks, costs, and charges" of their crypto activities. Additionally, there will be measures to prevent crypto market manipulation, money laundering, and terrorist financing.
One of the most significant changes brought by MiCA is the ability to track transactions above 1,000 euros ($1,097.55) from self-hosted wallets to centralized wallets, such as those hosted on crypto exchanges. Meanwhile, regulators will supervise the issuance of stablecoins that it classifies as "asset-reference and e-money tokens," while providing oversight of initial coin offerings to the public.
To enforce compliance, companies offering crypto services will need to register with at least one EU member country, while regulators such as the European Banking Authority and the European Securities and Markets Authority will ensure that everyone follows the rules.
MiCA rules cover a broad array of cryptocurrency assets that aren't currently regulated. However, they're not all-encompassing, and there are some assets such as non-fungible tokens (NFTs) that are not included in the new law.
Overall, MiCA is a significant step forward for the cryptocurrency industry and should help make the market safer and more transparent for everyone involved.
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