As the European Union releases its landmark Crypto-Assets markets (MICA) The plot, the basic promise of the law of a single market is under pressure.
In the latest phase of Byte-sized viewCointelegraph explores if Mica can survive until its promise.
Commitment versus the fact
The regulation is designed to simplify operations for crypto companies by introducing a single licensing system to all 27 member states. When licensed in a country, companies can “passport” their services across Bloc without navigating a patchwork of local policies.
But less than one year of implementation, national regulator in countries including France, Italy, and Austria are expressing concerns That passport may encourage companies to choose jurisdictions with lighter administration, a skill known as regulation arbitration.
“European regulation competition is nothing new,” said Jerome Castille, head of compliance and regulatory activities for Europe in coinshares.
“We saw the retail trade platforms flowing to Cyprus and Malta under the Mifid. In Mika, the hope is that at this time it is different. But again, if we see companies choosing the constituents seen as more climbing.
The issue, according to Castille, is not a lack of policies but a lack of parent -implementation. “Europe has a very high level of investor protection and is probably the highest worldwide,” he explained.
“The real issue now ensures that MICA is fully implemented. Without formal guidance, national regulators come from their own call. That’s where the difference is or even the regulation arbitration is derived. If we get right, the market becomes safe and attractive -attract for global players. If we don’t, the change will look something else.”
Related: SECURES BITGO LICENSED TO LAUGE REGULATED CRYPTO TRADING IN EUROPA
Little Fish Big Pond
For smaller companies, Rollout proves especially challenging. Marina Marinezic, executive director of the European Crypto Initiative, has noted that capacity gaps between regulators and the speed of new policies can squeeze startups out of the market.
“It is a great time to obey a very short time,” he said.
“For the biggest, having a single access to the entire European Union market is really positive. But unfortunately, for smaller companies, it’s a big burden and they may not live this process.”
While MICA is a bid of Europe to rule out crypto regulation, its success depends on whether the rules are applied equally to the entire bloc.
As Markezic added, “There are 27 different national competent authorities that administer the same regulation. Some are larger, some smaller, some have experience, some are less. This is really a test for Europe to see if we can handle always.”
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