EU signed the Mica Act: Regulation of stablecoins could fell up the use of large stable coins quickly
EU signed the Mica Act: Regulation of stablecoins could fell up the use of large stable coins quickly
Mica, the new European cryptocurrency law, was officially signed today by the President of the European Parliament Roberta Metsola and the Swedish Minister of Rural Affairs Peter Kullgren. It was emphasized that the use of large stable coins could quickly be restricted and the supervisory authorities should rethink the daily limits.
StableCoins are cryptocurrencies that should map the price of fiat currencies such as the US dollar and help to avoid the price volatility of cryptocurrencies such as Bitcoin and Ether. Due to some incidents such as the collapse of the algorithmic stable coin VAT and the short-term cancellation of the binding of USDC
According to the Mica Act, issuers of stablecoins who exceed the upper limit of 200 million euros must hire their emission activities and work with the supervisory authorities to bring transactions below the upper limit. The law firm Clyde and Co emphasizes that the use of certain larger stable coins could be quickly restricted. This could accelerate the growth of digital currencies of the central banks (CBDCS).
However, it is pointed out that the spread of private stable coins in other legal systems could have negative effects on the cryptom market in the EU. The legislators have taken into account possible negative effects of the regulations, but it is expected that the use of stable coins is restricted by the current rules.Most feedback on Mica was positive. The law enables start-ups and smaller companies better access to the market, which promotes innovation and competition. Paolo Ardoinino, CTO of Tether, welcomes the initiative of Mica, but also emphasizes the need for further discussions and revisions of the framework conditions for private stable coin providers.
There are criticisms regarding the regulations of Mica. Some argue that it is too careful, while others say that there are no threats to the stability of the financial market.
Mica is expected to come into force in 2024 after it has been published in the EU's Official Journal. The implementation of the regulations and guidelines will depend on how they are enforced in the Member States and whether the legislature will continue to react to innovations in the crypto industry.
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