Industry Updates

EU’s MiCA approval ‘landmark moment’ for crypto

The move could drive institutional investor demand for crypto ETPs

Theo Andrew

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The European Union’s approval of the Markets in Crypto Assets (MiCA) bill has been hailed as a “landmark moment” for cryptocurrencies set to drive growth and innovation across the continent.

EU lawmakers approved the bill last Thursday, voting 517-38 in favour, becoming the first major jurisdiction globally to introduce broad crypto regulation.

The aim of the bill focuses on consumer protection and enhanced money-laundering directives but is also seen to be a boon to the European crypto market.

“The fact that a framework for investor protection and stability within digital assets will soon be in place across the EU is a massive boost for the digital assets sector within Europe,” Bradley Duke, co-CEO at ETC Group, said.

“We have seen that when individual countries in the EU put in place a cohesive regulatory framework for companies working with digital assets, it encourages growth, innovation and job creation through the certainty and stability that sensible regulation brings.”

The legislation means the EU will have a unified approach to crypto asset regulation, meaning firms will be able to ‘passport’ their operations into other countries.

Commentators have also noted the increased investor confidence the regulation will bring.

Nigel Green, CEO of deVere Group, added: “This will further attract more institutional investors who bring with them huge levels of capital, experience and influence, which can help increase demand and drive up prices in the long-term.”

The move further highlights the stark differences between how the US is approaching the market versus Europe.

“The Securities and Exchange Commission (SEC) has taken an openly hostile stance against companies trying to operate legitimately within the space while simultaneously doing next to nothing to put in place a functional regulatory framework,” Duke said.

“The opportunity for Europe to now become the world’s digital assets hub is very clear.”

Green added: “The US and UK now have the opportunity to catch up with the EU on crypto regulation, which they inevitably will do – and probably sooner than many expect.

Signs the asset class is recovering from the depths of the ‘crypto winter’ have emerged over the past few months, with bitcoin 62% up this year, despite falling 9% over the past week, as at 21 April.

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