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Companies need to start preparing for the European Union’s new crypto laws now, even though they won’t be applied until the end of next year, Chainalysis’s head of policy for Europe said during a recent webinar.
Markets in Crypto Assets (MiCA) was published in the EU’s official journal last week, setting the clock ticking before it's officially applied, creating new obligations on crypto-asset providers and issuers serving customers in the region.
While the regulation will become law on 29 June this year, the first rules won’t come into effect until the same date in 2024, with the rest being applied by the end of that year.
But Janet Ho, head of policy for Europe at Chainalysis, warned both businesses and regulators not to be complacent and start readying for MiCA as soon as possible.
“These are the preparations you want to start now – maybe even yesterday,” she said.
Citing the timeframes set out in MiCA, Ho said during a webinar that in a “good case scenario,” it could take between four and five months for applicants to secure a MiCA license from their local competent authority.
Those wishing to operate crypto-related businesses in the EU will need to apply for authorization in their chosen member country, and the text of the landmark regulation specifies that authorities have 25 working days to let the applicant know if any information is missing, and another 60 working days to grant or refuse their request.
“If you want to continue your business, you need to take into account that 4-5 months, if not more,” said Ho.
But companies need not see conforming to the regulation as simply a burden, she said. There would also be benefits to securing authorization.
“Once you get one license, you can also scale up the business within the EU,” Ho noted. MiCA will allow businesses to "passport" their practices into other EU countries without further authorization, once they have gained a license in one.
She added that there could even be benefits “beyond Europe” if MiCA comes to be seen as the gold standard of crypto regulation.
“If you’ve got the MiCA license, you are complying, you’re being verified,” she said. “There are no standardized rules in any other part of the world.”
Some even expect the standards set by MiCA to become commonplace in other countries. EU lawmakers have urged their counterparts around the world to take inspiration from the package when creating their own crypto rules.
Last month outspoken SEC commissioner Hester Perice said that regulation efforts in the EU and the UK could serve as a "model" for the U.S.