The release of the forthcoming Markets in Crypto Assets (MiCA) regulation in the EU’s official journal signals a landmark moment in the crypto space. With the regulation set to become law on June 29th and the first rules coming into effect in 2024, Chainalysis’ Head of Policy for Europe, Janet Ho, is urging cryptocurrency companies to start preparing for it as soon as possible.
Despite the new policy not taking effect until the end of next year, preparing for regulatory compliance with the new rules will require significant time, effort, and possibly even major changes to business models. Operating without a license in the EU will no longer be an option, and each company will have to apply for authorization in its chosen member country.
According to Ho, a good-case scenario would see applicants securing a license from the relevant authorities within four to five months. Authorities will then have up to 25 working days to provide a response and inform applicants if any information is missing. Following that, applicants may have to wait an additional 60 working days for the authorities to grant or refuse their request.
During this waiting period, companies may be unable to continue operating, underlining the importance of making preparations as early as possible. Ho emphasizes that it would be too late for firms to start their preparations once the law begins to be implemented. Instead, they should take advantage of the short window of opportunity to apply for and receive a license without having to halt their business operations during the waiting period.
On the flip side, conforming to the regulations isn’t only a burden for the firms, as it comes with certain benefits. MiCA allows for firms to “passport” their practices into other EU member countries without needing further authorization from local authorities. This means that if one member nation greenlights them, they can essentially operate in any other member country.
Furthermore, becoming compliant could offer great opportunities to scale up a business and potentially expand beyond Europe if MiCA ends up becoming a global standard. Currently, there are no standardized rules in any part of the world, so MiCA could fill that void by becoming a gold standard for the majority of Europe.
While other nations aren’t obligated to adopt MiCA, EU lawmakers have encouraged them to take inspiration from the package when developing their individual crypto rules. Last month, SEC commissioner Hester Pierce highlighted the UK and EU’s regulatory efforts as a model for the US’s own crypto laws, thereby suggesting the possibility of MiCA becoming a global standard in the future.
Source: Cryptonews
