Regulation
With the entry into force of MiCA, are cryptocurrencies entering the era of regulation?
Cryptocurrency and Web3 companies have asked for more regulatory clarity For years.
And now, with the news The European Union summit will be held on Sunday (June 30) Cryptocurrency Markets Act (MiCA) new regulatory requirements for stablecoin issuers have come into effect, observers are wondering whether the “Wild West” days of the digital asset industry are now a distant memory.
After all, the cryptocurrency and digital asset industry shows no signs of slowing down as we approach the second quarter of the 21st century. Having stricter disclosure requirements, regular audits of cryptocurrency firms, and stronger capital reserve requirements will help build trust and transparency in the market, and the EU’s implementation of the MiCA provision for stablecoins puts the EU at the forefront of cryptocurrency regulation.
Yes, stablecoin issuer Circle announced on Monday (July 1) that it has secured a Electronic Money Institution (EMI) License, becoming the first global stablecoin issuer to obtain the necessary license to issue dollar- and euro-pegged stablecoin tokens within the EU, under the MiCA framework.
“Achieving MiCA compliance through our French EMI license represents a significant step forward, not only for Circle, but for the entire digital financial ecosystem in Europe and beyond,” said Circle’s Chief Strategy Officer and Head of Global Policy. Dante Away said in a declaration“As digital assets become increasingly integrated into the traditional financial landscape, it is essential to establish robust and transparent frameworks to foster trust and adoption…building a more inclusive and compliant future for internet finance.”
Among the top 10 stablecoins by market cap, only USDC is currently MiCA compliant.
to know more: What the July EU MiCA Implementation Means for Global Regulation
No more shortcuts or rules bypassed for cryptocurrency companies
“Circle’s announcement today is an important milestone in the ongoing development of the Internet financial system, with one of the world’s largest economies establishing clear regulations that make stablecoins legal electronic money, and ushers in a new phase in the development of the cryptocurrency market as a mainstream infrastructure for payments, finance, and commerce,” Circle co-founder and CEO Jeremy Allaire said in a Monday Post on X (formerly Twitter), noting that MiCA marks “the beginning of the growth and mainstream adoption phase” of digital assets.
The idea of seeing major global legislation enshrining stablecoins in the financial system of the world’s third largest economy is something that would have been inconceivable just 10 years ago.
This also means that there will be no more shortcuts or regulatory shortcuts for crypto and Web3 companies, at least not in Europe.
AS Amias Geretypartner at QED Investorstold PYMNTS last June, “the cryptocurrency community believed and had a real belief that what they were doing was so new that existing laws could It is not possible to apply. And in the history of financial services, there has never been a group of people with any commercial success who had that belief… once you have that belief, then you start looking for excuses not to conform.”
But now, with the implementation of MiCA on Sunday, the era when the cryptocurrency industry chose to rely on regulatory havens while seeking unfettered access to global markets is over.
“Looking to the future, I hope that ESMA [the European Securities and Markets Authority] works with the industry to help companies comply rather than regulate through enforcement measures like fines or penalties,” Eleanor Gaywood, chief strategy officer at Coincover, told PYMNTS.
to know more: What CFOs Should Know About the Growing Use of Stablecoins
The EU was not the only major global economy to recently launch a cryptocurrency-focused regulatory framework.
On Friday (June 28), the U.S. Department of the Treasury and the Internal Revenue Service (IRS) released new regulations on tax reporting requirements for the sale and exchange of digital assets. The regulations are designed to help taxpayers file accurate returns and pay taxes already due under applicable law.
Decentralized platforms that do not hold assets will be exempt from IRS regulations, while other custodial cryptocurrency platforms will be required to report transactions to the IRS starting in 2026.
“These final regulations will implement the bipartisan directive from Congress to ensure that digital asset owners receive the information they need from brokers to file their taxes more accurately, more easily, and less costly, and that the IRS has the information it needs to address the tax evasion risks posed by digital assets,” an IRS spokesperson wrote in a statement provided to PYMNTS.
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