The European Union's landmark legislation for cryptocurrencies, known as the Markets in Crypto Act (MiCA), has been praised by Nigel Green, CEO of deVere Group, as a "landmark moment" that will drive cryptocurrency prices. The legislation, led by Stefan Berger, MEP, means that the EU now has a unified approach to crypto asset regulation across all 27 member states, which allows firms approved in one country to "passport" their operations into others. The MiCA legislation also ensures that new coins approved in the EU do not endanger currency stability and that supervisory structures prevent incidents like the crypto exchange FTX's Lehman Brothers moments.
According to Green, the EU's regulation of the cryptocurrency market is a sign of the market's maturity, indicating that cryptocurrencies are now mainstream. He believes that with clear and consistent legislation in place, investors will have more confidence in the market and feel more secure in their investments. This will 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 regulation is also expected to help reduce fraudulent activities in the market, improve the wider reputation of the industry, and increase mass adoption, thereby maintaining crypto prices on an upward trajectory. The new rules are expected to be in force from next year, putting the EU ahead of the US and UK, which are yet to bring in legislation for the crypto market.
However, a UK official recently said that regulation could be implemented within a year, and the US and UK will likely catch up with the EU on crypto regulation. Green believes such regulation is necessary to protect investors, tackle cryptocurrency criminality, reduce the possibility of disrupting global financial stability, and offer a potential long-term economic boost to jurisdictions that introduce it.
Overall, the proactive and forward-thinking work being done by central banks and governments in this area must be championed, as digital is the inevitable future of finance.
