The so-called MiCA (Market in Crypto Assets) is the European Union’s new crypto regulation.
It has already been finally approved, but will not actually come into effect until next year.
However, apparently crypto companies that want to work in EU countries would better start gearing up now to become compliant with the new regulation.
MiCA: Chainalysis statements on crypto regulatory framework in EU
Chainalysis is one of the world’s largest blockchain analytics companies.
It is based in New York City, and offers software to analyze public blockchain transactions, so much so that it has the FBI among its clients.
In addition to being experts in on-chain analytics and tracking, by now at Chainalysis they have also developed expertise in the regulatory compliance of cryptocurrency transactions, and since they work with many businesses they have also developed specific expertise in analyzing the regulatory compliance of crypto companies themselves.
As news.cnyes.com reports, during a recent webinar Chainalysis’ head of European policy, Janet Ho, said that crypto companies should start preparing now for MiCA’s entry into force, even if such regulation will not be implemented until the end of next year.
In fact, according to Ho, in some cases it could take four to five months to obtain a MiCA license.
Moreover, Ho urges that regulatory compliance should not be seen as a burden, because she stresses that there are advantages to being licensed. The point is that once a license is obtained, it is possible to expand one’s business within the European Union, because the MiCA will allow companies to transfer their practices to other EU countries without further authorization.
What’s more, she also speculated that MiCA could become a kind of standard in the field of crypto regulation, so getting a license to operate in the EU could also help you operate in other countries.
The rest of the world
So far very few countries have clear and specific regulations for those operating in the crypto sector.
This helps a lot for professional traders, and in particular start-ups, since in the absence of certain regulation the risks of not being compliant are greatly increased.
For now, the EU does not yet have active crypto regulation, but it is now only a matter of time, because the final text of the rules has already been approved, and will certainly come into force next year.
Other countries that are even further ahead are definitely Switzerland, where such regulation has been there for years now, and especially the United Arab Emirates (UAE), where Dubai is located.
The UAE came after Switzerland, but it is succeeding in attracting many crypto companies.
China also seems to be moving in this direction, starting with Hong Kong, which is a special administrative region of China.
For now there is no clear and specific crypto regulation yet, but it seems that they are working on it in Hong Kong, so much so that it may not be long before it comes into effect.
The main problem is in the US, where publicly traded companies like Coinbase are under attack from authorities because they are accused of not complying with unclear and unspecific regulations.
Even the same government agency that accuses Coinbase (the SEC) has not yet been able to provide a certain and clear answer as to what regulations the US exchange is required to comply with, and more importantly what it should actually do to comply with them.
Truth be told, the US Congress is working on crypto regulation, but for now this work seems to have stalled because of a fundamental clash between the Democratic government and the Republican Congress.
However, should next year’s presidential election be won by a Republican candidate, and should Congress remain Republican-majority, they could simply use the MiCA text as a basis for quickly developing new crypto regulation that would also apply to the US.
The importance of the MiCA
In the European Union, the MiCA is likely to be of considerable importance in the evolution of the European crypto industry.
In fact it makes it suddenly possible for anyone to enter the industry, even institutions or those entities that are held to very high standards of regulatory compliance, such as banks.
When it goes into full effect it could open the doors of the crypto sector wide to all those big players who have so far remained at the door for fear of problems or retaliation from a legal standpoint.
Should the enactment of the MiCA, during the year of Bitcoin’s fourth halving, produce a boom in attention to the crypto sector, it is to be expected that in 2025, when the new US government takes office, the United States of America may also decide to take a similar path.