Like any other jurisdiction or country, the European Union is attempting to control the rapidly expanding crypto market. It is, however, the only one with an industry-leading regulatory framework. EU legislators continue to hammer out new laws and regulations to maintain the crypto market safe and secure for both corporations and users. MiCA is a similar regulation developed to strengthen the security of the industry.
MiCA stands for Markets in Crypto-Assets. It is a regulatory framework created in 2018 to establish a standard licensing system across all EU member states by 2024 and help currently govern out-of-scope crypto markets, assets, and service providers. It will apply to all EU member states once it is implemented.
Under MiCA, once a crypto firm has been licensed in one EU member state, the license will become “passportable,” meaning the company will be allowed to operate in another EU country without needing approval or extra licenses from the local government.
The MiCA framework allocates 26 of its 168 pages to an asset-referenced tokens subcategory. Asset-referenced tokens are a sort of stablecoin or cryptocurrency meant to preserve their value. However, unlike dollar-pegged stablecoins like USD coin (USDC) or tether (USDT), they are backed by commodities, fiat currencies, or crypto assets. But, MiCA excludes the decentralized finance (DeFi) market.
Now, organizations in the crypto world have a debatable stand on the regulations as some see them as a constraint on the freewheeling crypto industry. But LCX is already aligned to comply with the MiCA regulations. This is because LCX offers a regulatory platform for its users to keep them at ease about the security of their investments. It has been regulated by the Financial Market Authority of Liechtenstein, complying with eight blockchain technology regulations.
The European Commission designed the Digital Finance package with the intention of keeping the European Union’s financial sector competitive by giving customers access to more innovative products while maintaining consumer safety and financial stability. Retail strategy, digital finance, digital resilience, and legislative suggestions on crypto-assets, such as MiCA, are all included in the package.
MiCA is now in the midst of final negotiations between the European Council, Commission, and Parliament. Governments are frequently chastised for restricting technological innovation through legislation, but this will not be the case here. The full implementation of this rule will only increase the security and safety of consumers and companies dealing with crypto-assets. So, let’s look forward to a future with a safe and secure crypto world where the whole crypto community can work together in harmony.
LCX AG is a company found in 2018 and registered in Liechtenstein No. FL-0002.580.678-2. LCX AG is regulated by the Financial Market Authority of Liechtenstein under the registration No. 288159 as a trusted technology service provider.
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