The Circle EU Director, Patrick Hansen, has said that he expects major European banks to roll out crypto-asset services within the next four years. Hansen made the comments in a blog post on the impact of the Markets in Crypto-Assets Regulation (MiCA) on the European Union (EU) crypto industry.
Before the launch of MiCA, crypto companies operating in the EU had to comply with a patchwork of national regulatory frameworks, which made it costly and challenging to operate across the entire EU market.
However, MiCA now provides a binding EU-wide regulatory framework, making it easier for crypto businesses to operate across the entire EU market. Furthermore, he said that offshore and unregulated companies would no longer be able to target EU consumers proactively.
MiCA: Game Changer For EU Crypto Industry
The introduction of MiCA is expected to increase the competitiveness of regulated businesses and lead to greater institutional adoption and activity in the EU crypto market.
However, the practical success of MiCA will depend on the implementation standards and enforcement practices developed by EU supervisory authorities.
According to Hansen, MiCA’s potential to become a globally adopted regulatory standard, similar to GDPR for privacy, is also being discussed.
The MiCA operating standards may attract numerous companies globally due to the enormity of the EU market, which is the world’s largest internal market comprising 450 million affluent consumers.
However, the longer the US regulatory vacuum for crypto-assets persists, the greater the global impact of MiCA standards is expected to be, per Hansen.
Nevertheless, MiCA’s introduction is anticipated to bring about regulatory clarity in the face of worldwide uncertainties while also drawing capital, talent, and businesses to the EU and presenting a significant opportunity for an economic and technological resurgence.
However, the full effects of MiCA will only become apparent once technical implementation standards provide practical operational guidelines.
If EU supervisory authorities develop strict implementation standards that burden industry participants, it may lead to a minority of EU crypto startups managing to shoulder the substantive legal and compliance costs.
Additionally, supervisors could consider most NFT and DeFi projects to fall within the scope of MiCA and require them to comply, leading to resources migrating out of the EU. Therefore, while the potential for MiCA to set global standards is present, it is far from a foregone conclusion.
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