Regulation
Balancing cryptographic innovation and MiCA compliance
The Markets in Crypto-Assets (MiCA) Regulation marks a significant turning point for the cryptocurrency industry within the European Union (EU). With the entry into force of these new rules, crypto companies they are ready to face both challenges and opportunities.
In an exclusive interview with BeInCrypto, Ilya Volkov, CEO of crypto platform YouHodler, shared his insights on how MiCA will shape the future of crypto-financial services.
Impact on cryptocurrency growth, innovation and consumer confidence
MiCA is the first explicit regulation for crypto assets in the EU, offering legal clarity for stakeholders. It classification digital assets, specifies applicable regulations and designates responsibility for enforcement.
This regulation addresses regulatory issues, ensuring a level playing field for crypto institutions in the EU and eliminating regulatory fragmentation between member states. It also protects investors, prevents fraud and ensures compliance with anti-money laundering (AML) and financial laws. Volkov sees MiCA as a revolutionary step in creating a cohesive regulatory environment for crypto assets across the EU.
To know more: What are Cryptocurrency Markets (MiCA)?
“The key benefit is that MiCA represents a significant step forward in correcting the disconnect that has long existed between global operations and local regulations,” he said.
He stressed that financial markets, including cryptocurrencies, operate globally but are subject to local regulation. This inconsistency has historically posed significant obstacles for both international Web3 companies and individual customers.
“For companies like Youhodler, regulatory frameworks like this will greatly facilitate access to international markets. In the case of MiCA, it allows companies to reach all EU member states without submitting repetitive license applications in each country,” he added.
Furthermore, MiCA’s comprehensive requirements and guidelines to enhance consumer protection can promote a more transparent and trustworthy cryptocurrency market. Volkov believes that transparency is key to strengthening consumer trust.
“Protected by MiCA, consumers can now know if their digital wealth is in the hands of a legitimate service provider. This peace of mind is a great help for individuals and for the mass adoption of cryptocurrencies,” she said.
The regulations also address environmental concerns associated with crypto operations. YouHodler has proactively aligned its operations with sustainable practices, with its research and development team working to upgrade the company’s technology infrastructure to save energy and reduce environmental impact.
MiCA’s regulatory framework also offers unique opportunities for companies like YouHodler to stay at the forefront of the competitive cryptocurrency market. By speeding up the licensing process, MiCA facilitates the expansion of YouHodler’s presence across the EU.
Volkov acknowledged the hard work needed to update the platform for compliance, but stressed that additional layers of regulation and protection will help the company stand out by filtering out unqualified actors, such as non-compliant offshore companies that target the company’s customers. ‘EU.
Balancing the advantages and disadvantages of MiCA
Despite the clarity, adapting to MiCA requirements presents unique challenges. For example, providing yield products on stablecoins has been a common practice for Crypto Asset Service Providers (CASPs) and exchanges for the past five years. However, companies serving EU customers will no longer be able to do so due to the initial phase of MiCAwhich targets stablecoins.
Recent reports also indicate that several cryptocurrency exchanges, including Binance, are remove some crypto assets from the list to comply with the MiCA regulation. Volkov highlighted the need for YouHodler and other Web3 platforms to migrate from non-compliant stablecoins to those that meet MiCA standards. Currently, you see USDC is the most compliant dollar-backed stablecoinbut Volkov predicts that more compliant options will soon emerge.
“Our team is working diligently to update our products and services to ensure full compliance and timely support for customers looking to convert their digital assets,” Volkov said.
Furthermore, the current version of MiCA has yet to cover decentralized finance (DeFi) adequately. However, Volkov is confident that future updates will address this innovative and active part of the crypto ecosystem.
However, the global implications of MiCA cannot be overstated. Volkov believes that MiCA establishes a precedent for the international regulation of cryptocurrenciesserving as a model for other regions.
To know more: Cryptocurrency Regulation: What are the advantages and disadvantages?
“Countries in Latin America and Asia will adopt similar approaches in the near future. In this regard, we are also preparing for the LATAM market. We submitted our application in Argentina,” he told BeInCrypto.
As the industry prepares for potential market turbulence within the first year of MiCA implementation, Volkov remains optimistic about long-term sustainable growth. He believes MiCA represents a significant step forward, instilling a sense of preparedness and anticipation for the future of cryptocurrencies.
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