EU Crypto Regulations Will End ‘wild west’ Era: Lawmakers

In the European Parliament, voting for MiCA crypto regulations will begin on April 20, 2023.
If passed, MiCA would receive final approval in May 2023.

EU Crypto Regulations: 2022 witnessed multiple crypto events that made investors lose trust in the industry, and many called for a dire need for regulations in the crypto industry. Many nations are trying to devise rules to manage the crypto industry. The European Union’s new regulations are supposed to end the industry’s ‘wild west’ era and reinstate lost trust.

Upcoming EU Crypto Regulations

The proposed Markets in Crypto Assets (MiCA) regulation will be voted upon on April 20, 2023. There were serious discussions in the parliament on the proposal on April 19, 2023, where many supported the initiative as a significant step forward in the bloc.

A Spanish MEP, Ernest Urtasun, was tasked with putting the legislation together. The regulations were aimed at marking the end of the ‘wild west’ era, where crypto entities could operate in an unregulated environment. Since the inception of the crypto industry, there weren’t many regulations that regulated huge losses for initial investors.

This lack of oversight made this an asylum for international criminal organizations and bad actors. The German MEP, Stefan Berger, was the lead architect of the regulations. He said that this would put the EU way ahead in token economics.

The biggest crypto failure of 2022 was FTX, and EU’s Financial Commissioner Mairead McGuiness said that if the exchange had been under the jurisdiction of the EU, many of its practices would have been impermissible. He also pointed out that MiCA requires companies to be prohibited from using clients’ funds and must disclose conflicts of interest.

Mixed Reactions from the Parliamentarians

Many parliamentarians supported the EU Crypto Regulations, while some raised their voices against them. Irish MEP Chris MacManus clarified that he is backing MiCA due to its ability to create transparency and ensure consumer protection.

MacManus does not have an interest in fostering the use of crypto assets. He feels that crypto is like a pyramid scheme criminal gangs use for money laundering and other sinister purposes.

Paul Tang, Dutch MEP, compared crypto with a historic incident in the Netherlands in 1637 called the tulip craze – one of the earliest financial market bubbles. When the bubble that was the tulip craze burst, savers, speculators, and investors lost heavily. He pointed out that the similarities between the incident and crypto were stark.

Most don’t know what to use crypto for, but still, it’s the next big thing. Right now, the tulips are a part of Dutch culture, and someday crypto could also achieve a similar status.

The German MEP, Gunnar Beck, objected to the EU Crypto Regulations, arguing that the EU is “criminalizing decentralized finance and its users” as more transactions were reported to relevant authorities. The MEP said that through these regulations, the EU is trying to establish financial surveillance.

If the parliament passes the law, then before being enforced, MiCA is supposed to receive final approval from the European Council in May 2023. The rules regarding stablecoins could be enacted by July 2024, and added requirements would come around January 2025.