The finance ministers of the European Union have given their consent to the process of formulating a regional regulatory structure for digital assets, called the Markets in Crypto Assets (MICA). These regulations will cover cryptocurrency exchanges, wallet suppliers, utility tokens, asset-backed tokens, stablecoins, and anti-money laundering (AML) responsibilities for crypto companies. Sweden’s finance minister, Elizabeth Svantesson, believes that MICA will protect the interests of investors and prevent activities such as money laundering and terrorism funding. The EU members also agreed to cooperate on the regulation of crypto asset taxation and the sharing of information provided by Virtual Asset Service Providers (VASPs).
The regulation of crypto companies in the US has been difficult, with the US Securities and Exchange Commission (SEC) having a forceful approach. Hester Peirce, a rebel in SEC, believes that MICA should be used as an inspiration for SEC. Coinbase, a leading centralized exchange in the US, recently sued the SEC for not providing proper regulatory features.
MICA sets the foundation for licensing and structuring for providing utility tokens, stablecoins, and other digital assets. Exchange operators must have national licenses and stablecoin suppliers must have the required reserves for flat pegged tokens. The European Commission introduced MICA in September 2022 which had fresh cybersecurity offerings and a trial program for distributed ledger technology-based marketplace framework. However, only a few EU member states have accepted the all-inclusive Web3 regulations.