The post MiCA’s stablecoin regime takes effect amid uncertainty appeared on BitcoinEthereumNews.com.

Key Takeaways MiCA’s phased implementation starts with strict regulations for stablecoin issuances and services. Licensing complexities and issuance limits pose significant challenges under the new MiCA framework. The MiCA stablecoin regime came into effect yesterday. However, its implementation was met with some uncertainty and challenges regarding the scope, application, and impact of the new rules. What is MiCA? MiCA, or the Markets in Crypto-Assets Regulation, is a comprehensive regulatory framework for crypto assets and related services across EU countries. MiCA aims to foster innovation, ensure consumer protection, maintain market integrity, and support financial stability in the EU crypto market. The MiCA proposal was introduced in 2020, with its final text approved by the members of the European Council in October 2022. Following its publication in the Official Journal of the EU in November 2022, MiCA was voted into law last year. MiCA has many parts and will be fully implemented over the next two years. The regulation started to apply in a phased manner, with the stablecoin regime (Titles III and IV) coming into force on June 30 this year (yesterday). MiCA defines and categorizes crypto-assets into three main types: asset-referenced tokens (ARTs), e-money tokens (EMTs), and other tokens. The regulation applies to the issuance, trading, and provision of services related to these crypto-assets within the European Economic Area (EEA). The full regulatory framework for crypto asset service providers (CASPs) will become applicable six months after the stablecoin regime, on December 30. How does MiCA affect stablecoins like USDT and USDC? Under MiCA, stablecoin issuers must obtain authorization and be licensed by the relevant national authorities in the EU. Stablecoins deemed “significant” based on a set of quantitative and qualitative indicators will face additional and significantly increased prudential requirements. This includes higher capital requirements, liquidity buffers, and risk management controls.…

---

Filed under: News - @ July 1, 2024 12:22 pm