EU’s MiCA Regulations Set to Shake Up Crypto Market in 2024
The European Union’s Markets in Crypto-Assets (MiCA) regulations are causing a stir in the blockchain and crypto space even before they are fully in force. With significant changes set to take place in 2024, crypto companies are scrambling to prepare for the upcoming legislation changes and ensure compliance in the regulated crypto landscape.
In June 2024, the European Securities and Markets Authority, along with the European Banking Authority, will introduce Delegated Acts as part of the MiCA regulations. This will mark the full applicability of certain parts of the regulations, particularly covering asset-referenced tokens and fiat-backed stablecoins. Entities involved in business operations using these tokens will be required to implement stringent regulatory measures, including KYC and AML protocols. The rest of the regulations will come into effect by the end of 2024 or early 2025.
Crypto Asset Service Providers (CASPs) and Asset-Referenced-Tokens issuers will be among the entities regulated under MiCA. These companies will need to integrate KYC and AML measures to ensure compliance with the new regulations.
While the obvious solution for companies is to implement KYC and AML protocols to stay compliant, the process presents several challenges. Developing these protocols in-house can be time-consuming and costly, with many crypto companies opting to use KYC providers to streamline the process. Data security concerns also arise, as some users are hesitant to provide sensitive information to third-party companies.
Despite the challenges, the MiCA regulations are expected to have a positive impact on the EU crypto market. By establishing a unified standard across EU countries, MiCA will simplify operations for companies and make compliance easier and more cost-effective. The regulations also aim to protect investors by banning algorithmic stablecoins, which have proven to be unstable and risky.
While some in the crypto space are skeptical about the upcoming regulations and their impact on costs and security, others believe that clear regulations are necessary for the market to mature and thrive. As the crypto market continues to evolve, 2025 is shaping up to be a pivotal year for all crypto users.
Alexander Ray, CEO of Albus Protocol and JFactory, brings a wealth of experience in developing infrastructure and financial solutions to the discussion of MiCA regulations. With over 20 years of experience in the industry, Ray offers valuable insights into the potential impact of the regulations on the crypto market.