On May 31st, the European Union signed the Markets in Crypto-Assets (MiCA) regulations into law making way for the regulatory guidance on crypto assets and service providers to come into effect. Since its draft in 2020, MiCA was published in the Official Journal of the European Union (OJEU) on June 9 and now counting down the days for the law to officially take effect. 

This would mean that crypto companies should start preparing to implement and comply with MiCA’s requirements. Stablecoin regulations will apply from June 30, 2024, and rules for exchanges will take effect on December 30, 2024.

MiCA, the Makers in Crypto-Assets, provides a definition of a crypto asset as a digital form of value that can be electronically stored and transferred through distributed ledger technology. Additionally, this legislation offers clarification on the criteria for classifying something as a cryptocurrency or a token.

In addition, those who want to operate a cryptocurrency-related business in the EU must apply for authorization in their chosen member country. 

On the other hand, the authorities have 25 business days to inform the applicant of any missing documents and another 60 business days to grant or reject their application. Companies should not see compliance as a burden as there will be benefits in obtaining authorization. Once a business gets a license, it can also expand the business within the European Union.

Meanwhile, the European Authorities and Markets Authority will set out proposals in July for how MiCA rules should work in practice including the forms and notifications that crypto companies and established funds have to follow in order to offer services within the bloc.