As the European Union rolls out its landmark Markets in Crypto-Assets (MiCA) framework, the law’s key promise of a unified market is already under pressure.
In the latest episode of Byte-Sized Insight, Cointelegraph explored whether MiCA can live up to its promise.
Promises vs reality
The regulation was designed to simplify operations for crypto firms by introducing a single licensing system across all 27 member states. Once licensed in one country, companies would be able to “passport” their services across the bloc without navigating a patchwork of local rules.
But less than a year into implementation, national regulators in countries including France, Italy, and Austria are voicing concerns that passporting could encourage firms to choose jurisdictions with lighter oversight, a practice known as regulatory arbitrage.
“Regulatory competition in Europe is nothing new,” said Jerome Castille, head of compliance and regulatory affairs for Europe at CoinShares.
The issue, according to Castille, is not a lack of rules but a lack of consistent implementation. “Europe already has a very high level of investor protection and probably the highest globally,” he explained.
Related: BitGo secures license to launch regulated crypto trading in Europe
Little fish big pond
For smaller firms, the rollout is proving particularly challenging. Marina Markezic, executive director of the European Crypto Initiative, noted that capacity gaps between regulators and the pace of new rules could squeeze startups out of the market.
“It is very intense to be compliant in a very short amount of time,” she said.
While MiCA was Europe’s bid to lead on crypto regulation, its success will depend on whether the rules are applied evenly across the bloc.
As Markezic added, “There are 27 different national competent authorities supervising the same regulation. Some are bigger, some smaller, some more experienced, some less. It’s really a test for Europe to see if we’re able to supervise consistently.”
Listen to the full episode of Byte-Sized Insight for the complete interview on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows!
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Source: https://cointelegraph.com/news/europe-mica-framework-faces-early-test-as-national-regulators-push-back-passporting?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
