By Dare idowu-Agida September 2, 2022
The EU is making significant progress geared toward governing crypto-assets. The new bill will regulate these assets. The EU Digital Finance Strategy will provide a framework for the future of crypto-assets. The trouble with handling crypto-assets is that they’re digital. There’s no physical place to build a regulatory perimeter around them. The majority of ICOs are registered outside the EU too.
Why the EU Crypto Regulation?
The EU has initiated the crypto-assets governing bill to regulate these assets. The EU uses the Digital Finance Strategy, which provides a framework for the future of crypto-assets. The new bill will help create a more robust framework for regulating this new asset. It will be transparent and inclusive going forward.
The Mica Bill will regulate crypto assets and protect investors from fraud and scams. It provides a regulatory framework for ICOs, virtual currencies, exchanges, wallets, and trading platforms. The Mica regulation will establish a “one-stop shop” for any company looking to set up in the EU. It means they can register their company in one member state and then operate across Europe.
The Mica Bill has been debated in the European Parliament. The Members of the European Parliament (MEPs) are proposing amendments to this comprehensive law. It will regulate how personal data is collected, processed, stored and shared.
Is Cryptocurrency Legal In Europe?
Cryptocurrency is legal in the European Union. Before this new law, there were different regulations by individual member states. Cryptocurrency taxation varies from country to country. So, some are charging 0% to 50% tax on derived earnings.
The European cryptocurrency list is on the rise. There are 56 crypto ATMs in Austria, a country of 9 million people, making it the largest patronizer of crypto in Europe. Austria has roughly 400 branches of post offices across the country accepting Bitcoin. Isn’t that massive and ought to make any authoritarian government worried? Cryptocurrencies, a form of digital currency, have become increasingly popular. The Pew Research Center survey shows that roughly 16% of Americans also have invested in, traded or used this type of currency.
In the past, The European Parliament has worked on legislation regulating crypto-assets. The Mica regulation stands for the Markets in Crypto-Assets Regulation, a set of rules regulating the crypto-assets. Its goal is to reduce the risks related to these assets and promote market integrity.
Markets in Crypto Assets Regulation
Come to think of it, will the EU regulate crypto per se? In July 2022, an article published on Barrons wrote digital assets will be controlled in Europe under the Markets in Crypto Assets (MiCA). It means stablecoins and crypto businesses under the new MiCA rules will be liable if they lose investors’ assets. Hence, subject to European market abuse regulations. It includes market manipulation and insider trading.
In Europe, Ethereum and wETH are the most popular cryptocurrencies; they are also popular in many other countries. wETH is an ERC-20 wrapped form of Ethereum used by decentralized exchanges (DEXs) such as Uniswap to swap ETH for other ERC-20 tokens).
The value of Bitcoin transactions in the U.K. makes up 27%, while Ethereum and wETH make up 40%. Cryptocurrency still comes with many disadvantages. The cons are scaling problems, volatility, lack of proper regulation, etc. We may see a lot of improvements and research made to the system in the future.
Besides its cheaper and faster money transfers, cryptocurrencies are systems that can’t fail at a single point. Cryptocurrencies are notoriously volatile, consume a lot of energy, and are used for criminal purposes.
The government has decided to address the risks. President Joe Biden once expressed the advantages of crypto and their underlying technology in March 2022. As of 2023, China plans to follow suit after ten countries have launched digital currencies. The number of nations looking to start their cryptocurrencies has exceeded 100. These countries are responsible for 95% of the global GDP. Though some cryptocurrency investors are panicking, others anticipate success in a regulated future.