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With the launch of MiCA, are cryptocurrencies entering the age of regulation?
Crypto and Web3 companies have been asking for more regulatory clarity for years.
And now, with the News Sunday (June 30) that the European Union landmark Cryptoasset Markets Act (MiCA) new regulatory requirements for stablecoin issuers have been implemented, and observers are wondering if the “Wild West” days of the digital asset sector are behind us.
After all, the digital asset and cryptocurrency industry shows no signs of slowing down as we approach the second quarter of the 21st century. Having stricter disclosure requirements, regular audits of crypto companies, and more robust capital reserve requirements will help build trust and transparency across the market — and the EU’s implementation of the MiCA provision for stablecoins puts the EU at the forefront of crypto regulation.
Stablecoin issuer Circle already announced on Monday (July 1) that it had secured a Electronic Money Institution (EMI) License, becoming the first global stablecoin issuer to obtain the necessary license to issue dollar and euro-pegged stablecoin tokens within the EU boundaries, under the MiCA framework.
“Achieving MiCA compliance through our French EMI license is a significant step forward, not just for Circle, but for the entire digital financial ecosystem in Europe and beyond,” Circle’s Chief Strategy Officer and Head of Global Policy Dante Disparte said in a declaration. “As digital assets become increasingly integrated into the mainstream financial landscape, it is essential that we establish robust and transparent frameworks to foster trust and adoption… building a more inclusive and compliant future for internet finance.”
Of the top 10 stablecoins by market cap, only USDC is currently MiCA compliant.
Read more: What the EU’s MiCA implementation in July means for global regulation
There are no more shortcuts or workarounds for cryptocurrency companies
“Today’s announcement from Circle is an important milestone in the continued development of the internet financial system, with one of the world’s largest economies establishing clear regulations that make stablecoins legal tender and ushering in a new phase in the development of the cryptocurrency market as a mainstream infrastructure for payments, finance and commerce,” Circle co-founder and CEO Jeremy Allaire said in a Monday Post on X (formerly Twitter), noting that MiCA marks “the beginning of the growth and mainstream adoption phase” of the digital asset.
The idea of witnessing major global laws enshrining stablecoins into the financial system of the world’s third-largest economy is something that would have been inconceivable just 10 years ago.
What this also means is that there will be no more regulatory shortcuts and shortcuts for crypto and Web3 companies — at least not in Europe.
As Amias Geretypartner in QED Investorstold PYMNTS last June, “The crypto community believed and had a real conviction that what they were doing was so new that existing laws could cannot be applied. And in the history of financial services, there has basically never been a group of commercially successful people who had that conviction… once you have that conviction, then you start looking for excuses not to deliver.”
But now, with the implementation of MiCA on Sunday, the era in which the cryptocurrency sector chose to base itself outside regulatory havens while seeking open access to global markets is over.
“Looking to the future, I hope that ESMA [the European Securities and Markets Authority] works collaboratively with industry to help companies comply, rather than regulating through enforcement actions like fines or penalties,” Eleanor Gaywood, chief strategy officer at Coincover, told PYMNTS.
Read more: What CFOs Should Know About the Growing Use of Stablecoins
The EU wasn’t the only major global economy to recently launch a cryptocurrency-focused framework.
On Friday (June 28), the U.S. Treasury Department and the Internal Revenue Service (IRS) released new regulations around tax reporting requirements for the sale and exchange of digital assets. The regulations aim to help taxpayers file accurate returns and pay taxes already owed under current law.
Decentralized platforms that do not hold their own assets will be exempt from IRS regulations, while other custodial cryptocurrency platforms will need to report transactions to the IRS starting in 2026.
“These final regulations will implement Congress’ bipartisan directive to ensure that digital asset owners receive the information they need from brokers to file their taxes more accurately, easily, and cost-effectively, and that the IRS has the information it needs to address the tax evasion risks posed by digital assets,” an IRS spokesperson wrote in a statement provided to PYMNTS.
See more at: B2B, B2B Payments, circle, crypto regulation, cryptocurrency, EMEA, European Union, IRS, IRS, Cryptoasset Markets Act, MICA, News, PYMNTS News, regulations, stable coins, USDC