As a result of the new regulatory requirements, he added that businesses may pull back their activities in the EU, hurting innovation in the bloc’s cryptocurrency sector and consumer access. “Expect statements from large exchanges and stablecoin issuers over the next few weeks and months as MiCA gets fully implemented,” he said.
De Maere stressed that the new regulations specify that only stablecoins meeting specific requirements can trade freely in Europe. He added that some of these requirements include obtaining an “electronic money license” and being under the supervision of the European Banking Authority.
“Additionally, there are rules such as the maximum trading volume being capped at 200 million euros, which is low compared to the 30-day average trading volume of USDT, approximately $30 billion,” De Maere said.
Confused compliance efforts amid unclear regulatory guidance
De Maere painted a picture of confusion and uncertainty amongst EU-based cryptocurrency sector participants ahead of the implementation of the new regulations. “There is no real consensus among exchanges, legal councils and industry players about what needs to happen to ensure compliance,” De Maere said.
He added that leading industry players are issuing warnings about the lack of clarity, noting that the European Banking Authority only published its guidelines on technical standards last week. “As a result, it is no surprise that no one has managed to find an elegant solution to implement the regulation,” he said.
According to Chainalysis Head of Policy in Europe Matthias Bauer-Langgartner, stablecoins are the biggest use case for crypto-assets today, so MiCA’s stablecoin regime is a pivotal moment for the regulation of crypto-assets in Europe.
“The slightly nebulous scope of the stablecoin regime’s, particularly with regards to current virtual-asset service providers (VASPs), and the dual classification of EMTs as both funds and crypto-assets are likely to create significant uncertainties from June 30th onwards,” Bauer-Langgartner told The Block.
The EU’s MiCA regulatory framework becomes partially applicable for crypto asset service providers and their KYC/AML requirements at the end of June, and full compliance with the bloc’s new regulatory framework will be required by December 2024.
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