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The Electronic Money Association asked the Department of Finance for as long a transition period as possible before implementing the MiCA regulation.
According to a report from crypto-firms-seek-maximum-grace-period-before-eu-regulations-brought-to-bear/a1011678933.html” data-type=”link” data-id=”https://m.independent.ie/business/crypto-firms-seek-maximum-grace-period-before-eu-regulations-brought-to-bear/a1011678933.html” target=”_blank” rel=”noopener”>IndependentThe organization, which includes major fintech players such as Revolut and PayPal, among others, wrote to EU regulators asking for more time before applying the new regulatory framework.
The MiCA framework will require crypto companies to obtain authorization from a competent national authority before offering their services in the EU. It will also impose capital requirements, governance standards, disclosure obligations and consumer rights for crypto companies.
MiCA is expected to come into effect in December 2024, but some crypto companies expect a longer transition period, up to five years. They argue that the new rules could be more complex and expensive to implement, especially for smaller, more exclusive players in the industry. They also fear that regulations will stifle innovation and competition in the crypto space.
MiCA’s background dates back to the growing popularity and adoption of cryptocurrencies and digital assets, which have raised concerns regarding investor protection, market integrity, and financial stability. The need for a harmonized regulatory framework across the EU has created a fragmented and uncertain regulatory landscape for cryptoassets.
One of the critical challenges of MiCA implementation is striking the right balance between regulation and innovation. The cryptocurrency market is known for its fast-paced and innovative nature, and overly onerous rules could stifle innovation and hinder industry growth. Therefore, regulators must carefully design regulations that provide adequate protection to investors without stifling innovation.
Another challenge is the cross-border nature of the crypto market. Geographic borders do not bind cryptocurrencies and digital assets and therefore a harmonized regulatory approach is necessary to ensure a level playing field for market participants across the EU. Coordinating and aligning regulations between member states can be complex and requires close collaboration and cooperation between regulators.
Additionally, the changing nature of the cryptocurrency market poses a challenge for regulators. technology and market dynamics are constantly changing and regulators must adapt and update the regulatory framework to keep pace with these changes. This requires a flexible and agile regulatory approach, which can be challenging in a highly regulated environment.
