Analysis of the role of Mica in the design of global cryptor regulation
Analysis of the role of Mica in the design of global cryptor regulation
Markets in Crypto Assets (Mica) is the first comprehensive set of rules that aim to bring the largely unregulated cryptocurrency markets under state regulation.
It is part of a more comprehensive digital financial package, also known as "Digital Operational Resilience Act (Dora)", which aims to protect the financial services sector from fraudulent activities. It is expected to come into force in July 2023 and lay the foundation for the rules gradually until January 2025.
While the United States is stipulated with the clarification of what the digital assets are, the European Union, with Mica in the picture, has doubled the question of how it should regulate, instead of dealing with the question of who should regulate the space-an approach that would be possible to prove to be a game channel.
The big question, however, is how Mica will affect the European cryptoma market.
concerns about an exit from Europe
The EU Council, which represents 27 Member States, unanimously approved Mica and is therefore the first major jurisdiction of the world with a crypto license system.
The positive response to the robust EU regulatory framework can be attributed to the fact that the legislator has largely dispensed with the approach of "regulation through enforcement". Therefore, several other markets and jurisdiction have started to consider Mica as a precedent in order to remain competitive on the world market. In his footsteps, countries such as Great Britain, Australia and Hong Kong
Several experts have thought about how Mica could shape the regulatory landscape in the broader crypto industry.
Brinda Paul, Director of Compliance at Banxa, is convinced, for example, that Mica sets a high standard for consumer protection, which will benefit customers enormously from a more reliable and trustworthy cryptom market. In conversation with cryptocolor , the managing director further added that "an increased customer confidence has the potential to increase participation in the crypto economy."
The main expected that its introduction as a catalyst is used by attracting both start-ups and well-known companies and creating the conditions for a healthier competition.
As far as end users are concerned, Laura Chaput, head of the compliance department at the Brussels-based market maker Keyrock, said that governance rules will increase transparency, rules for stable coin issuers "to be more confident that their tokens are properly reserved and redeemable, and ..." Protection measures against market manipulation will be market integrity Increase. “
For regulated companies that have already introduced strict KYC and AML procedures, the changes will neither be very significant nor noticeable. According to Przemyslaw Kral from Zonda, users could encounter payment problems of unregulated or non -conformer exchanges and are likely to be asked to provide additional information about their identity and source of money.
Combating market manipulations and abuse
There are justified speculation about how the alleged misconduct at FTX could have been prevented if Mica had been implemented earlier. In fact, Stefan Berger, a member of the European Parliament's Economic Committee, previously explained that the introduction of Mica as a global sentence of regulatory standards would have prevented such a catastrophe.
On this aspect, Paul von Banxa pointed out that Mica introduces strict measures to promote safe, transparent and fair cryptoma market, including the disclosure of insider information, strict prohibitions of insider transactions, illegal disclosure of insider information and market manipulation.
Therefore, it can be said with certainty that obtaining approval within the framework of the regulatory system will not be an easy task and that the ongoing controls by the responsible authorities will lead to significant and recurring compliance activities on the part of the cryptodic providers.
tiana Whitehouse, Chief Compliance Officer at CLC & Partners, continued:
"MICA is largely in line with the existing market abuse ordinance (Mar) of the EU, which applies to securities and derivatives. After the new legislation, CASPs and other participants who enable trading in the EU must have adequate controls to prevent and uncover."
tank apple
The implementation of Mica is said to take place in two stages. The first 12-month introductory period deals with stable coins and the next 18-month period with the rest of the industry. The focus is initially on the implementation, which is about offering a far -reaching set of rules for the cryptoma market.
Overall, the regulation aims to regulate the issue and provision of services related to crypto-assets and stable coins. But it left several components of the digital asset industry outside of its scope. One of them are the non -fungible tokens.
Although the NFT sector is excluded from the explicit white paper requirements of the Mica, it will probably still feel the influence of regulation, says Yuriy Brisov, co-founder and Chief Legal Officer from Ioginality NFT Marketplace. He added:
"By introducing AML/CTF rules, Mica has an indirect effect on NFT marketplaces and could contribute to more transparency and trust in the booming world of digital art, collectibles and more and ultimately enhance the NFT area."
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