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- VeChain stated that it will continue to work with governments in Europe with VET having compliance built-in into its architecture.
- The comprehensive MiCA framework on digital assets has been hailed by prominent crypto personalities due to clear rules for crypto token issuers, traders, and crypto platforms.
In a historic development, the EU parliament unveiled the Markets in Crypto Assets (MiCA) regulatory framework on Thursday, April 20. This is the first comprehensive package of rules by a major economy aimed at regulating the crypto industry.
The MiCA regulatory framework seeks to reduce risks for consumers buying digital assets. It also makes it mandatory for crypto wallet providers and exchanges to seek licenses to operate across the bloc. Layer-1 smart contract platform VeChain has extended its support stating that it would continue to work with government agencies in Europe and other global certifications to define the standards for digital assets. Commenting on the development, VeChain noted:
An important step towards #blockchain adoption, and a core aspect of why #vechain continues to work with governmental agencies in Europe & global certification experts to define the standards #crypto will work to. $VET has compliance built in to its core, from operations to network architecture. #VechainThor is well positioned for this phase of adoption, and is ready to embrace what comes next.
Along with VeChain, some of the top crypto personalities have also extended support to the new MiCA regulatory framework by the EU. Binance chief Changpeng Zhao hailed MiCA as a “pragmatic solution to the challenges we collectively face”. Zhao also said that his company was “ready to make adjustments to our business over the next 12-18 months to be in a position of full compliance”. Similarly, Ripple’s head of policy Susan Friedman praised the EU over the US for taking a clear regulatory stand.
While the US continues to focus on enforcement instead of clarity, the EU has taken a big leap forward with a sensible, progressive approach to #crypto regulation. We look forward to building and growing in the European marketplace! 🇪🇺 https://t.co/0NW8vchHxA
— Susan Friedman (@ss_friedman) April 20, 2023
Here’s what the EU’s MiCA regulations cover
The MiCA framework will be applicable pan Europe and will impose a number of requirements on crypto token issuers, traders, and crypto platforms. It will have rules around disclosure, transparency, authorization, as well as the supervision of transactions, noted the EU Parliament.
In its statement on Thursday, the EU Parliament added that the platform will require the customers to inform about the risks associated with their operations. Furthermore, they shall also inform that the sales of new tokens shall come under their regulations.
The rules will also mention an oversight over stablecoin issuers such as Tether and Circle who shall be required to maintain ample reserves to meet the redemption requests in the event of mass withdrawals. Also, stablecoins that are too large in size might face limitations such as 200 million euros ($220 million) in transactions per day.
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Furthermore, the MiCA regulatory framework will also address the environmental concerns surrounding crypto. Here, crypto firms need to disclose their energy consumption as well as the impact of digital assets on the environment.
Additionally, the European Securities and Markets Authority, or ESMA, shall get absolute power to step in and restrict or ban crypto platforms if they do not implement investor protection rules or threaten market integrity and financial stability.
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