Regulation
EU Cryptocurrency Industry Faces First Major Compliance Deadline This Month –
At the end of the month, the cryptocurrency industry in the European Union (EU) will face its first major deadline to comply with new regulatory approaches.
The Markets in Crypto Assets (MiCA) Regulation, approved by the EU last year, aims to introduce a series of rules and regulations to safeguard investors and consumers, as well as strengthen anti-money laundering measures in the cryptocurrency sector.
On June 30, 2024, MiCA’s the jurisdiction will extend to stablecoins—cryptocurrencies pegged to traditional fiat currencies such as the euro or dollar. To issue such stablecoins within the EU, companies must hold an e-money license and demonstrate that they have adequate reserves to maintain the peg.
Crypto firms prepare for a new rule change
In anticipation of the deadline, some companies, such as Binance, the world’s largest cryptocurrency exchange, have already taken measures to restrict access to stablecoins that do not meet MiCA requirements.
Coinbase, another major industry player, has expressed concern that several stablecoins may have to be delisted to meet the new standards.
The implementation of MiCA is part of a broader effort to align the cryptocurrency industry with traditional financial regulations.
MiCA’s stablecoin regulations will come into force across the EU on June 30th.
The EU figured out how to regulate this market before the US.
Now it seems that stablecoin issuers and providers are setting up in Europe and modeling themselves according to EU standards.
A great missed opportunity 🇺🇸
—Jake Chervinsky (@jchervinsky) June 10, 2024
Coinbase, which has established a significant presence in Ireland, intends to make Ireland its primary regulatory hub for MiCA compliance. The company believes that adhering to higher standards and promoting transparency will improve the industry and increase credibility with customers and regulators.
While Coinbase has committed to operating under Ireland’s MiCA, other companies have yet to decide on their preferred location. Binance, for example, is present in Ireland but has not disclosed its decision regarding compliance with the new regulation.
The Central Bank of Ireland plans to open the authorization gateway early in the third quarter of this year.
The bank will host an industry event in July to inform companies about the application process and expectations.
Compliance with MiCA will not only improve anti-money laundering controls, but will also create new investment and deal-making opportunities.
The regulatory framework provides investors with greater confidence and favors companies that have successfully navigated the regulatory landscape.
Some venture investment firms, such as The Hashgraph Association, are actively seeking early-stage cryptocurrency and Web3 startups to invest in, viewing regulatory compliance as a valuable asset.
Ireland emerges as a crypto hub in the EU
Last week, the CBI approved Crypto.com as a virtual asset service provider (VASP).
As of now, the list of VASPs registered in Ireland consists of 14 entities, with Ripple, Gemini, MoonPay, Standard Chartered’s Zodia custody platform and Paysafe among the notable names.
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Ireland has become an attractive destination for crypto companies, thanks to the country’s efforts to promote innovation and create an enabling environment.
In 2018, the Irish Government established an Innovation Hub, providing a platform for fintech companies to interact with the Central Bank of Ireland in a more informal way.
Disclaimer: Cryptocurrencies are a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all your capital.