Opinion by: Julie Bourgeois, head of legal and compliance, 6 monks
Digital asset regulations are rapidly emerging to ensure the transparency and safety of all market participants. It is not brighter than Europe, where two different regulatory models appear.
On the one hand are the European Union markets in crypto-assets (MICA), which offers accurate regulation for all 27 member countries. On the other hand is the UK that, after Brexit, there is still no common regulation like MICA.
With it Before “Plan for change,” the UK claims to want to be “the best place in the world to change,” and it is working on new laws to better protect people and support crypto growth.
For fund managers, these differences can be a difficult puzzle to solve. Should they favor the legal certainty offered by MICA following the EU? Or should they bet on the upcoming UK changes?
What can Mica promise?
Mica clarified crypto questions in the EU. Today, regulation provides a comprehensive and, more important, well -frame to all member states.
Perhaps Mica’s most significant advantage is this Passporting Mechanisms, from which many companies benefit. Once the grandfather’s time and the national competent authority have given green light through the MICA license, a crypto service provider may offer crypto asset services in any EU country. It is desirable for companies planning to measure their EU level activities – no more fragment regulations.
Mica’s positive influence, especially during the business -scale phase, can be seen in the region. In the past, launching in another EU country meant re-legalization and the month of approval. Today, a approved Casp status in a country means legal that you run throughout the EU. It saves thousands of euros and work months.
The approach to the UK’s agile
Throughout the channel, the UK is there, with a more fitting but fragment approach. So far, the UK has no mica-like unified law, but it has a bold view of integrating crypto into existing systems.
The UK crypto law, which is part of the “plan for change,” promises the creation of laws that will ensure more transparency. In the first instance, official laws, not just recommendations, were created to adjust the crypto industry in the UK.
The country’s main purpose is to protect crypto users by establishing clear laws for risk disclosure when purchasing crypto assets and accurate service terms. Considering that crypto that boost The UK economy by 57 billion British pounds ($ 77 billion), these new policies can significantly influence the UK crypto environment.
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Although regulations are more difficult, it leaves a room for change. The UK in the United States is talking about creating a joint sandbox – a regulated environment for testing new crypto products.
Domicile decision of the crypto fund
Choosing where to set up can be a difficult decision considering these differences. Especially for crypto funds. This is not just a legal question but a strategic decision, as they work closely to the crypto asset service providers. What should they consider when making this choice?
Thanks to Mica as a unified law, EU-based casps can benefit from more Stable Environmental compliance. The regulation creates a single licensing regime for crypto asset service providers.
MICA offers assurance for today’s managers and carers, which is especially important for institutional adoption. That predictable can be a significant competitive advantage for the EU and can drive more domicile companies there. This is especially associated with those companies that target cross-border expansion or institutional clients.
Luxembourg can be a potential place for setting up a fund within the EU. It has a strong history as a leading financial center and successfully creates and manages funds. Clear policies and support for new ideas make it a wise option for starting and running crypto investment funds under MICA.
On the other hand, the UK offers something more flexible and easier to build. It draws the audience from, for example, the fintech pioneers that test the new highs. While the UK is willing to experiment with the sandbox regulation mentioned earlier, it can be the point of view for domicile purposes.
Two paths with different strengths
The UK aims to bring crypto to the traditional financial system. It is more open to new decentralized products to enter the market. That said, the UK’s flexibility is a significant advantage. If, in the near future, the UK can balance the change in some investor protection, it can be a leading hub for Defi.
Meanwhile, EU’s MICA regulation provides a consistent legal environment. Through strong rules, the EU is positioning itself as a safe shelter for crypto funds and a global example of how regulation can introduce clarity and make markets more attractive.
Ultimately, it doesn’t matter in one region to beat another. Instead of competitors, they can complement each other in shaping the future of digital properties.
Opinion by: Julie Bourgeois, Leader of Legal and Following, 6 Monks.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
