The European Union’s new crypto regulation, known by the acronym MiCA (Markets in Crypto-Assets), has been finally approved, and immediately generated a chorus of comments, including from Binance, Coinbase and Ripple.
In particular, comments were made by representatives of some of the world’s leading exchanges, such as Binance and Coinbase, and those of some of the industry’s leading companies, such as Ripple.
Binance comments on MiCA, followed by Coinbase and Ripple
Binance is the world’s largest crypto exchange by trading volume, very active in Europe as well, despite some issues that forced it to shut down some specific services in some EU countries.
Recently Binance has some problems with US regulation, and especially with authorities accusing it of allowing the exchange of unregistered securities. This problem, however, is common to virtually all exchanges operating in the US.
Regarding the new European crypto regulation, Binance’s Regional Head of Europe and MENA, Richard Teng, said:
“Today’s vote in the EU to implement the Markets in Cryptoassets (MiCA) regulation has marked a milestone in the development of the cryptocurrency and Web3 industry.
The regulatory landscape has shifted forward and that is a positive thing for users and the industry.
MiCA will bring regulatory clarity to one of the largest markets in the world, making the EU, an even more attractive place for Web3 companies to innovate and attract talent.
As with all regulation, the small details will be key, but overall we believe this is a pragmatic solution to the challenges facing the industry. At Binance, we are putting together clear rules of the game for crypto exchanges to operate in the EU.
We will make the necessary changes to our business over the next 12-18 months to fully comply with regulation, protect users and support innovation.”
This is therefore a very positive comment.
It is worth mentioning that the final version of the MiCA has smoothed out some of the critical points of earlier drafts, and has the virtue of being a clear and comprehensive framework that actually helps crypto companies know precisely what they can and should do.
Such positive comments from Binance should come as no surprise, precisely because in other major contexts where the rules are still unclear (see the US) there are many more problems.
Perhaps thanks to MiCA the EU has become a territory where it has become easier for crypto operators to operate, at least compared to before.
Coinbase speaks out
Coinbase is the largest US crypto exchange, but it has many customers in Europe as well.
Although the US market is significantly higher in volume than the European market, Coinbase is a publicly traded company, and therefore considered on average safer because for example it is obliged to comply with strict governance rules.
Coinbase’s vice president of international policy, Tom Duff Gordon, said:
“The European Parliament’s adoption of MiCA today is a pivotal moment for the crypto industry in the region, and the work of European policymakers should be seen as exemplary.
The region is recognizing the potential and societal promise that emerging technology can provide.
The EU is stepping up to the mark, while other notable jurisdictions are struggling to provide a solid, cohesive regulatory framework that gives clarity to a burgeoning innovative industry.
This proactive step taken by the EU proves their commitment to embracing technology that will update legacy systems and in doing so, allow for the creation of new opportunities.
Already we are seeing that the EU now matches the US in its share of software developers; around 30% apiece globally. The US used to lead the charge with 40%. This level of growth does not happen by chance.
Concerted efforts have to be made, such as developing a regulatory framework that will provide clarity and stability for businesses operating in the space.”
Duff Gordon makes an obvious comparison between the situation that is now clear in the European Union, and the situation that is still unfolding in the US. Indeed in this respect the US has lagged behind, partly because of the political uncertainty surrounding the institutional approach to crypto.
However, the US could now simply take a cue from the new European rules, so that it finally has a clear path to follow in order to get a clear and comprehensive regulatory framework on cryptocurrencies as soon as possible and regain lost competitiveness.
Ripple is one of the world’s leading crypto companies, and its XRP cryptocurrency is the sixth largest in the world by market capitalization, and the fourth if stablecoins are excluded. The fifth, Cardano’s ADA, is trailing at $10 billion, insomuch that it capitalizes only slightly more than half of XRP.
Ripple’s EMEA Policy Director Andrew Whitworth said:
“The European Parliament’s passing of MiCA is an important milestone for the crypto industry around the world.. Now that the EU has provided comprehensive clarity about the regulatory treatment of the crypto industry, it is up to the European Supervisory Authorities and National Competent Authorities to develop the specific rules and requirements for firms.
Consistency in implementation around the EU will be key in providing crypto companies with the operational clarity to fuel innovation across Europe and guard against unwitting fragmentation of the Single Market. As part of this, there is a need to ensure that the legislation is applied proportionally with regards to how different companies’ crypto offerings are treated, based on the risk profiles of their activities.
Fundamentally, this is an exciting development for the industry and we look forward to supporting the EU and national authorities as they apply the regulation to ensure the European crypto industry thrives and grows.”
Whitworth rightly shifts the focus to the implementation of the regulation, because while the theoretical rules are now clear and final, their concrete implementation isn’t yet.
He also points out that the EU is composed of many different countries with different legislation, so it may not be easy to apply the same regulation in the exact same way. Failure to do so would create regulatory chaos that could lead to problems, so it is still too early to sing victory.