Impact of MiCA on Bitcoin and other Decentralized Projects

[dimonstration]

The European Union voted in favor of the Markets in Crypto Assets or MiCA regulation on Thursday, April 20. The vote passed with 517 for and 38 against.

Correct me If I’m wrong but MiCA aims to regulate all the crypto company before it can operate or accept users from EU.

With Bitcoin is being a complete decentralized project, What will be the ruling on Bitcoin when MiCA was implemented. Obviously no one controls Bitcoin since Satoshi makes this blockchain decentralized.

Is this mean that Bitcoin will be banned from EU since it can’t comply with MiCA?


https://blockworks.co/news/eu-parliament-passes-mica-vote

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[Yogee]

The rule clearly targets companies or firms that are or will be involved with cryptocurrencies. This will include crypto exchanges and other platforms with a centralized point of operation so these so-called decentralized projects that are run by a centralized company will have to abide by this rule. Those that are run by anonymous or small group of people will probably have to think twice before they offer anything to crypto investors from EU.

Bitcoin development will continue but the wider acceptance could be affected. The regulation could have a positive impact for the mainstream since they would feel "protected" while those who prefer privacy may not like this.

[Baofeng]

[quote author=dimonstration link=topic=5449584.msg62121813#msg62121813 date=1681999134]

The European Union voted in favor of the Markets in Crypto Assets or MiCA regulation on Thursday, April 20. The vote passed with 517 for and 38 against.

Is this mean that Bitcoin will be banned from EU since it can’t comply with MiCA?


https://blockworks.co/news/eu-parliament-passes-mica-vote
[/quote]

Nowhere in the regulation that you can see Bitcoin though, it's more on the stable coins,So they have tighter rules on them.

MiCA will bring issuers of certain types of crypto-assets into the regulatory framework. Specifically, MiCA will establish new rules for stablecoins including Asset-Referenced Tokens (ARTs), E-Money Tokens (EMTs) and utility tokens. MiCA distinguishes stablecoins by defining ARTs as being linked to multiple currencies, commodities or crypto currencies and EMTs as being linked to a single currency. Utility tokens are intended to provide access to a good or service that will be supplied by the issuer of that token.

As for Crypto exchanges:

Under the provisional agreement, CASPs shall require authorisation in order to operate within the EU. Crypto-assets services include the operation of a trading platform, custody and administration of crypto-assets on behalf of third parties, the exchange of crypto-assets for funds/other crypto-assets, the execution of orders for crypto-assets, the placing of crypto-assets, providing transfer services for crypto -assets to third parties, providing advice on crypto- assets and portfolio management on crypto- assets. At a high level, CASPs that provide crypto-asset services to third parties (e.g. consumers) on a professional basis will be subject to new rules including governance and liquidity requirements.

https://www.centralbank.ie/regulation/markets-in-crypto-assets-regulation

Even CZ welcome this news:

[img width=410]https://talkimg.com/images/2023/05/16/blob6eaa5dc3dbbf41e5.png[/img]

https://twitter.com/cz_binance/status/1649018863298703361

So I don't think we have to something to worry about Bitcoin in EU, on the other hand this is just a validation that instead of trying to attack Bitcoin and crypto in general and kill it, might be better if they put a regulatory framework. It's just sort of admitting that they can't stop crypto.

Hopefully the US will have to think about their regulations and maybe they will learn a thing or two from their EU counterparts.

[Dalib]

The European Union voted in favor of the Markets in Crypto Assets or MiCA regulation on Thursday, April 20. The vote passed with 517 for and 38 against.

The approval of the MiCA regulation by the European Union is a significant development in the regulation of cryptocurrency and digital assets. The regulation aims to provide a clear legal framework for the issuance and trading of digital assets, as well as to protect investors and consumers.

It is expected to have a significant impact on the cryptocurrency industry in Europe and may serve as a model for other countries and regions to follow.

[thecodebear]

Hmm I guess it is yet to be seen if this will be positive or negative. Seems that some crypto exchanges are saying this is a good thing, I guess because unlike the US this provides regulatory clarity for them to operate without legal worry, though it looks like it will require them to go through a lot of red tape to be in compliance.

And I guess if this leads the public in Europe to view the crypto industry in general as safer that could increase participation.

And the stablecoin rule sounds good - requiring stablecoins that are backed by assets to hold 100% of the assets.

The environmental impact rule seems possibly problematic. Like do companies have to try to come up with the environmental impact of a token they issue? That would seem hard to do. And do crypto exchanges have to give the environmental impact of any crypto they offer on their exchange? If so is that going to be used to try to stop Bitcoin from being on exchanges because at least on paper it looks like it has a bad environmental impact and the positives it provides to the environmental/green energy industry can't be summed up in numbers. Which brings up the question on why crypto is being singled out in this way? Do they require for example Microsoft to issue an environmental report on how the running of all their millions of computers will effect the environment before allowing them to sell computers in Europe? Nope.

Also wallet providers needing to become licensed could be positive or negative. On the one hand it might make it easier for people to trust they are getting a safe wallet, especially for people new to the space who are worried about downloading random crypto wallet software. But on the other hand now wallet providers have to go through govt compliance to get licensed just to provide wallet software. Overall I think this aspect is positive because it will mean there are approved and presumably safe wallets and people don't have to worry about downloading a scam wallet.

It will probably put a halt to endless useless tokens being offered, at least in the EU, so that is a good thing. There will be many fewer crypto tokens being offered in Europe once this goes into effect. But due to needing to become licensed it means to create a crypto company that is offered in the EU you are gonna need financial backing, so no longer can someone just create a crypto company from scratch, because to offer your product you'd need lawyers and money to get through the red tape in the first place.


Anyway, the most important questions are will this limit Bitcoin in some way. Are the environmental impact rules a way to bias against bitcoin simply because bitcoin uses energy? And because, unlike everything else in crypto, Bitcoin is truly decentralized and so can't comply with licensing because there is no Bitcoin company does that mean the EU will try to not allow Bitcoin to be on exchanges because technically it isn't licensed?? I guess as long as common sense is used here to not try to harm Bitcoin this regulation could be okay and have positive things and make new people coming into crypto feel much safer, but it does makes the hurdle to build something in crypto much higher.

[thecodebear]

Hold up, did I read that right? MiCA wants to regulate all the crypto companies before they can operate or accept users from the EU? Sounds like MiCA is the new mom of the crypto world. I wonder if they'll start making us eat our vegetables before we can trade Bitcoin.

But what about Bitcoin, the most decentralized project in the game? It's like trying to regulate the wind or the tides. Good luck with that, MiCA!

Does this mean that Bitcoin will be banned from the EU since it can't comply with MiCA? It's like telling a fish to fly, it just doesn't make sense. Anyway, I just hope that this is a good news

Yeah I think this is the main concern. There are definitely positives to the regulation like providing legal safety to exchanges and making the industry safer for people to use, even though it makes it harder to build a crypto business and makes companies go through a lot of red tape. But yeah it seems like these regulations could possibly be used against Bitcoin if they are implemented in a corrupt way rather than a common sense way.

[Ucy]

Well, luckily Bitcoin is permissionless for everyone who wish to join... Or people need zero/little permission from Bitcoin to be part of its Network/System.
And it's Community-driven, open-source project that  anyone can participate and contribute ideas that mustn't violate its important ideals that help protect and keep the system, its participants and their assets safe and secure. Violating any of the ideal can weaken the security of the Bitcoin Network thereby exposing the participants/assets to attacks and other possible issues


Now, if one of their aims is to control the price they will only be as successful as what determines the price movements. They can't go against them as they are currently immune to  manipulations and other evil methods used in controlling prices/things in centralized settings.

Banning will actually be good for Bitcoin as people from the Region will be forced to use it the right way or the way it should be used, in peer-to-peer decentralized manner. And the price of Bitcoin tend to react well to this.

[Flexystar]

This is a piece of interesting news. A few days back I published a post regarding Coinbase CEO Armstrong and his thoughts on the MiCA, as well as the UK and EU, shall be highly supportive of the idea of regulating crypto.

Armstrong's thoughts were seeded from the rage of the USA getting stricter day by day about the crypto thus jeopardizing every exchanger out there.

I am not sure how much his contribution to the voting process but he definitely threw a sweet cake toward regulators and thus made everyone vote in favor of MiCA. This sort of regulation might look difficult for us but let us foresee its advantages on one side of it.

This is a revolutionary treaty because, on one hand, we are losing renowned exchangers, their offices are getting moved out of Western countries, various crypto-supported banks are shutting their doors due to FED regulations and SEC is tightening more on various token listings. I highly admire the timing of the MiCA voting process and it's acceptance to regulate the crypto.

The timeline is set to be by the 2024 year, so there is plenty of time for us to understand how and what will be regulated in the long run.

Lawmakers in the European Union on Thursday voted 517-38 in favor of a new crypto licensing regime, Markets in Crypto-Assets (MiCA), with 18 absentions, making it the first major jurisdiction in the world to introduce a comprehensive crypto law.
The European Parliament also voted 529-29 in favor of a separate law known as the Transfer of Funds regulation, which requires crypto operators to identify their customers in a bid to halt money laundering, with 14 abstentions.
The vote follows a Wednesday debate in which lawmakers largely supported plans to make crypto wallet providers and exchanges seek a license to operate across the bloc, and require issuers of stablecoins tied to the value of other assets to maintain sufficient reserves.

In a tweet, the European Commission's Mairead McGuinness described the vote as a "world first" for crypto rules.
"We’re protecting consumers and safeguarding financial stability and market integrity," McGuinness said. "The rules will start applying from next year."
In a statement released by the European Parliament, Stefan Berger, the lawmaker who led negotiations on the law, said the rules put the EU "at the forefront of the token economy."
"The European crypto-asset industry has regulatory clarity that does not exist in countries like the U.S.," Berger said. "The sector that was damaged by the FTX collapse can regain trust."
The European Securities and Markets Authority also welcomed the vote in a tweet, and said it will "announce in due time" its timetable for drafting secondary legislation under MiCA. "ESMA still warns consumers that investing in cryptoassets is a risky endeavour with limited safeguards at this stage," the EU agency added.
The Markets in Crypto Assets regulation was first proposed by the European Commission in 2020, and to pass into law has to be approved by the parliament and the EU’s Council, which represents the bloc’s member states. Its main provisions start to apply just over 12 months after publication in the EU’s official journal, likely in June.

EU Parliament Approves Crypto Licensing, Funds Transfer Rules

[Faisal2202]

With Bitcoin is being a complete decentralized project, What will be the ruling on Bitcoin when MiCA was implemented. Obviously no one controls Bitcoin since Satoshi makes this blockchain decentralized.

Is this mean that Bitcoin will be banned from EU since it can’t comply with MiCA?

No, BTC will not be banned because, as you mentioned BTC is decentralized by Satoshi Nakamoto then how is this single organization from one continent can centralize it by implementing AML policies? While BTC is being accessed and used in other continents too. They will not ban BTC because every other alt and DeFi-based project (for which MiCA is mainly made) depends on BTC if BTC is gone i don't think ALTs and DeFi will have the same trading volume (Correct me if i am wrong).

They had already passed another law for BTC only from the USA, Known as the "Travel Rule", Which is passed by 529 voters against 29. According to this, Sender has to provide a complete recipient of sending and the receiver's recipient of receiving the amount of BTC. So that they can confirm the transaction, This law only applies if you are making a transaction of 1000$ or euros, in this way they can confirm the transaction is not involved in any laundering case. That's an alternative to AML and MiCA policy for BTC for the people of the EU.
Source
I hope this might have covered your query.

[dimonstration]

With Bitcoin is being a complete decentralized project, What will be the ruling on Bitcoin when MiCA was implemented. Obviously no one controls Bitcoin since Satoshi makes this blockchain decentralized.

Is this mean that Bitcoin will be banned from EU since it can’t comply with MiCA?

No, BTC will not be banned because, as you mentioned BTC is decentralized by Satoshi Nakamoto then how is this single organization from one continent can centralize it by implementing AML policies? While BTC is being accessed and used in other continents too. They will not ban BTC because every other alt and DeFi-based project (for which MiCA is mainly made) depends on BTC if BTC is gone i don't think ALTs and DeFi will have the same trading volume (Correct me if i am wrong).

We are talking about banning Bitcoin for EU citizen and not the whole world. MiCA is only effective on EU which clearly stated on the article I attached. If MiCA is implemented, Anyone purchasing coin that is not follow the guideline is committing a crime and it doesn’t need to required AML policy for that since they are paying taxes which financial audit is required.

Nowhere in the regulation that you can see Bitcoin though, it's more on the stable coins,So they have tighter rules on them.

MiCA will bring issuers of certain types of crypto-assets into the regulatory framework. Specifically, MiCA will establish new rules for stablecoins including Asset-Referenced Tokens (ARTs), E-Money Tokens (EMTs) and utility tokens. MiCA distinguishes stablecoins by defining ARTs as being linked to multiple currencies, commodities or crypto currencies and EMTs as being linked to a single currency. Utility tokens are intended to provide access to a good or service that will be supplied by the issuer of that token.

What’s your source with this because it removed some part of the description on the 3rd condition. It’s not only utility token but other crypto asstes including utility token.

 

3. Other crypto assets, including utility tokens. A utility token means a type of crypto-asset which is only intended to provide access to a good or a service supplied by the issuer of that token.

There’s no way EU will forgot the most popular crypto assets to cover. They just didn’t specifically mention it.

[so98nn]

That’s not the correct statement entirely. MiCA has been proposed to know who is using the crypto currencies as whole. Obviously they have complete control on both sides that is bitcoin and altcoin. It would be meaningless if they just regulate the alts and leave bitcoin. Majority of the users would be happy if that happens. I mean this straight away mean that peeps are using bitcoin worn be regulated however those using alts will be regulated. Guess what, everyone loves bitcoin and they would simply switch to it.

One more time, bitcoin or any crypto currency can not be banned. It can be virtually blocked but there are always Back doors to access the network and use these currency. Overall, I don’t think they are putting ban.

Regulating is not a ban, it’s merely controlled structure to use that particular asset.