MiCA will mark the end of crypto’s ‘Wild West’: EU lawmakers

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European Union lawmakers say new cryptocurrency regulations in the region will end the industry’s Wild West era and restore confidence, following last year’s high-profile meltdowns .

The Markets for Crypto Assets (MiCA) will go to the vote of the European Parliament in Strasbourg tomorrow, marking a major milestone in the adoption of the proposals.

Ahead of the vote, MPs debated the merits of the package in the chamber today, with several hailing the introduction of a legal framework as a major step forward in the bloc.

Ernest Urtasun, a Spanish MEP who was one of the members tasked with drafting the legislation, said that MiCA would mark the end of the Wild West era for the unregulated world of crypto assets.

For more than a decade, the lack of regulation has resulted in massive losses for many new investors and provided a safe haven for fraudsters and international criminal networks. MiCA represents an important and necessary first step in bringing the crypto industry under regulatory scrutiny.

Stefan Berger, the German MEP who was the main architect of the settlement, said it would put the EU at the forefront of the token economy and restore the trust that was damaged by the FTX affair.

Several other members speaking in favor of MiCA also mentioned the catastrophic collapse of FTX. Finance Commissioner Mairead McGuinness even said that if FTX had been under EU jurisdiction, many of its practices would not have been permitted and pointed to MiCA rules that require companies to disclose conflicting interests. interest and not to use client funds.

Politicians express their concerns

While a dozen parliamentarians voiced support for the proposal, there was also divisiveness and backlash.

Irish MEP Chris MacManus said he supports MiCA because of its emphasis on transparency and consumer protection, but his own opinion on crypto is not high.

I have no interest in creating a market or promoting the use of crypto assets, he said. At worst, they are pyramid schemes, they are used by criminal gangs to launder money, they defraud workers, and they can waste huge amounts of energy for no real purpose.

Meanwhile, Dutch MEP Paul Tang likened crypto to an episode in his own country’s history: the tulip craze of 1637, an early financial market bubble.

The bubble burst, savers, speculators and investors were left in shambles, he said. The similarities with cryptography are obvious. Nobody knows what to use them for, but they’re the next big thing. However, he admitted that tulips have become part of Dutch culture and said that maybe crypto could achieve the same one day.

Objections were also raised by Gunnar Beck, a German MEP who said the EU was criminalizing decentralized finance and its users by requiring more transactions to be reported to the relevant authorities. The EU is establishing a state of total financial supervision, he added.

Many MEPs spoke of the need to keep the regulation relevant and to avoid falling behind technological developments.

Europe has missed the innovation train when it comes to the internet, said Ldia Pereira of Portugal. It is no longer enough to take the train, we must be the drivers of this new era.

If adopted by Parliament tomorrow, the MiCA will receive final approval from the European Council in May before being officially published. Its stablecoin rules will come into effect in July next year, but providers will have more time to get up to speed on some other requirements that won’t come into effect until January 2025.

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