Will MiCA Become the Global Standard for Crypto Regulation?

The EU’s Markets in Crypto Assets (MiCA) regulation could become a global standard.

Now approved by the European Parliament, MiCA will affect centralized crypto exchanges that do business in the EU. It could also shape crypto regulation elsewhere.

Setting the Regulatory Agenda

As a combined trading bloc that amounts to one of the world’s largest economies, EU regulations can have global consequences. From data privacy to the shape of contemporary antitrust laws, where the EU goes, others tend to follow.

From the perspective of businesses, the European Union often demands higher standards than other countries. And as such a large market, rules that apply in the EU can set the global standard for large multinationals. After all, why go to the effort of accommodating EU regulations only to set different compliance standards elsewhere.

Prior to MiCA, crypto regulation in the EU has relied on pre-existing anti-money laundering (AML) legislation. And when it comes to AML legislation, playing by the EU’s rules is critical for its trading partners.

In the UK, for example, AML rules have remained relatively aligned with the EU since Brexit. On that front, regulators across Europe share similar objectives.

Of course, the UK hasn’t opted for a dedicated MiCA-style framework for crypto regulation. But on the fundamental principles the two jurisdictions remain in sync. Both the EU and the UK have adopted an approach that treats the sector as an extension of the wider financial services industry.

Exchanges Face Europe After MiCA

Following a meeting with the UK’ Economic Secretary and Andrew Griffith this week, Coinbase CEO Brian Armstrong tweeted in support of the British approach. He said that the country “is moving fast on sensible crypto regulation.” At the same time, Coinbase recently published a blog post outlining recommendations for how the UK can become a “Web3 Innovation Hub

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Author: James Morales

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