Negotiations on the MiCa settlement are on the final stretch

Negotiations on the MiCa settlement are on the final stretch

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The European Council adopted this Wednesday the MiCa regulation which aims to regulate the crypto ecosystem. Next week, it will be up to the European Parliament to decide.

The draft MiCa regulation (for “Market in Crypto-assets”) was adopted by the European Council on Wednesday morning. The text will then be submitted to the vote of the Economic Affairs Committee of the European Parliament next Monday, as confirmed by a source from the European Parliament to BFM Crypto.

Implementation in early 2024

“Then, after the translation of the text into the more than 20 official languages ​​of the EU, the file should be adopted in the Official Journal of the EU to formalize its application. MiCA foresees an adaptation period of 12 to 18 months for to prepare for the new laws put in place. We can expect the laws to be in place by the beginning of 2024 at the earliest”, specifies the specialized media The block.

Protect the investor

At the beginning of July, the European Parliament and the Council had reached a provisional agreement on the MiCa regulation, which frames the cryptocurrency sector with the aim of protecting the investor.

For example, service providers on digital assets (PSAN in France) will have to obtain a license to exercise from the local authorities within 2 months. The MiCa text also uses the notion of CASP (“Crypto-Asset Service Providers”) instead of PSAN, players with at least 15 million users falling into this category.

As a reminder, in France, it is the Financial Markets Authority (AMF) which, since the Pacte law, can issue registration or approval to crypto-companies wishing to operate in France. To date, 52 players have received AMF registration, including recently Crypto.com, Société Générale Forge and the giant Binance. But none have been approved yet.

The regulation, which had been under negotiation for several months in Brussels, aims to protect investors “against certain risks associated with investments in crypto-assets and will allow them to avoid fraudulent systems”.

As a result, new obligations are incumbent on crypto-companies: they will thus be considered “responsible in the event of loss”. MiCA will also “cover cases of market abuse on any transaction or service, including market manipulation and insider trading.”

The negotiations in Brussels also took place in a particular context, with the last two crypto-crashes in May and June. During these periods, certain assets were more weakened than others, and in particular certain so-called “algorithmic” stablecoins such as the stablecoin terra USDT (UST) of the Terra blockchain (see our article on the stablecoin market)

The regulation therefore wishes to go further in the framework of stablecoins. The regulation will require stablecoin issuers to “build up a sufficiently liquid reserve, with a ratio of 1:1 and partly in the form of deposits.”

“Each holder of so-called ‘stablecoins’ will be able to be redeemed at any time and free of charge by the issuer, and the rules governing the operation of the reserves will also provide for an adequate minimum liquidity”, underlines the press release.

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