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By Landon Manning
MiCA, the proposed legislation to create a unifying standard of bitcoin regulations between the European Union’s 27 member states, has hit a major benchmark as legislators agreed on a final framework for the bill to move forward.
The Markets in Crypto Asset (MiCA) Regulation has been a major topic of discussion in the Bitcoin world for several months now, representing a new milestone in the global integration of bitcoin into various legal systems. In the EU, regulations are legal acts passed by the EU Council that immediately become law in all member states. In other words, legislators are planning to unify bitcoin policy on a grand scale, in a manner similar to how directives from the U.S. federal government can supersede pro- or anti-bitcoin policies made by a state.
The bill was approved by EU Council members on Wednesday, October 5, apparently containing little to no revisions from a previous version of the bill that the EU Parliament, Commission and Council agreed upon in June. This version of the bill was used as the framework for some companies to begin setting new business policies in the EU from at least August, but the unanimous approval in September means that the last chance has passed for the bill to “die in committee,” and that this policy will become law. Although the entire text of MiCA remains sealed, it is usually standard practice for these texts to be published in official channels well before they pass. The bill is expected to become law in 2024.
A major part of the motivation behind the MiCA initiative is the desire to further international agreements about bitcoin regulation not just between European countries, but on a global scale. According to Bloomberg, the EU has put cryptocurrency at the top of its agenda for upcoming meetings with the World Bank and International Monetary Fund and especially delegates from the U.S. “We have a crowded agenda for the U.S. next week, and one of the items that won’t be at the bottom of the list, it will be in there right around the top, is crypto,” claimed Mairead McGuinness, EU commissioner for financial services.
Many of the known articles included in MiCA feature various mechanisms to protect consumers and ensure a bitcoin economy that features certain norms of stability: strongly discouraging some of the shakier “stablecoin” projects, imposing licensing requirements and capital checks, etc. Also included, however, are plans that may involve curtailing the anonymity of bitcoin, like mandating a government-issued license to do business with exchanges. A tension naturally exists between a stateless and leaderless economic model and the mandates of one of the largest economic federations in the world; it’s easy to see how this could become a continuing source of friction for the Bitcoin community.
In a particularly relevant example of this tension, the day after this bill was signed, the EU enacted a second piece of cryptocurrency-related legislation: a crackdown on Russia. As part of a package of sanctions against the nation for the ongoing war in Ukraine, windows that had been previously narrowed are now completely shut. All cryptocurrency wallets, accounts and custody services originating in Russia are to be barred from any commerce within the European Union, and Bitcoiners in the EU are similarly forbidden from carrying out transactions with Russian businesses or individuals. What about the thousands of Russians who oppose the war? Could bitcoin be a tool for them, and what is the role of a state currency for the life of a political dissident under Putin? Questions like these seem very far from the agendas of the EU Council.
Still, tensions like this are only a natural consequence of bitcoin becoming more well integrated into the world of global business and society. Regulations that impose any kind of restrictions on the “wild west” of cryptocurrency are likely to chafe, at first, but a safer environment is necessary to attract the real mass adoption that Bitcoiners dream about. If one thing is certain, the international community has reacted to past setbacks and opportunities with a creative and rugged spirit, and the MiCA approval certainly seems like a real opportunity.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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