What’s next for EU’s crypto industry as European Parliament passes MiCA?

On April 20, the European Parliament voted to pass the Markets in Crypto-Assets (MiCA) regulation, the European Union’s main legislative proposal to oversee the crypto industry in its member countries. 

The MiCA regulation is a significant development for the crypto industry in the European Union. Prior to MiCA, crypto companies had to comply with 27 different regulatory frameworks across the EU member states, with Germany or France being costly and burdensome, for example.

Under MiCA, however, EU-wide regulations will apply, allowing companies to operate throughout the entire EU crypto market with a MiCA license granted in one country. This will increase the competitiveness of EU startups and may result in them gaining market share from unregulated competitors.

MiCA will increase the EU’s competitiveness

Moreover, MiCA could encourage more institutional adoption and activity in the EU crypto and blockchain market. Patrick Hansen, director of EU strategy and policy at stablecoin issuer Circle, told Cointelegraph that MiCA will enable European crypto firms to scale and grow faster, allowing licensed companies to offer their services throughout the world’s largest single market, with roughly 450 million people:

“The legal clarity will also foster innovation amongst financial institutions that have been previously hesitant to launch products and services due to regulatory uncertainty. Additionally, as MiCA is the first comprehensive regulatory framework for crypto assets from a major jurisdiction in the world, it is likely to attract considerable foreign capital and talent to the region.”

For Moritz Schildt, a board member of the Hanseatic Blockchain Institute and the German Blockchain Association, the biggest advantage of MiCA is that “it will come into force already this year,” giving the EU a chance to provide a unified regulatory framework for crypto assets and related providers.

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Creating a regulatory framework for a technology that sees new developments and outgrowths practically every month and evolves as dynamically as the tokenization of investment opportunities is “very challenging.”

“It should come as no surprise, therefore, that some regulations are not yet optimal and that questions about concrete applications remain unanswered,” Schildt said, adding that with MiCA, Europe has the opportunity to position itself “as a location for innovation and…