The Market in Crypto-Assets Regulation (MiCA) is the worlds first comprehensive law on the regulation of crypto. After being voted though European Parliament today it will come into effect 12 or more months from now. But what are some of its key points?

Firstly, wallet providers and exchanges now have to have a licence to operate within the European Union. This is to help protect from fraudulent companies, workers stealing clients funds or having a repeat of the FTX collapse. But what if your a small start up crypto exchange and need a licence to get your company of the ground? Its all too easy for the licence issuers to mark you as fraudulent and deny your application.

Secondly, stablecoin issuers will have to retain sufficient reserves to ensure that the stable coin doesn't crash from its mark. This is evidently their fear that another stablecoin crash will occur like terraUSD back in early May 2022. This is a step in the right direction for the EU. Its imperative that in regulating crypto they dont remove its unique properties that made it so successful in the first place. 

Finally, another law that was passed alongside MiCA was the Transfer of Funds regulation which obligates crypto operators to identify their customers in an attempt to limit money laundering. This is not the way to do it though. By removing privacy from crypto, one of its defining characteristics, you may as well not use crypto at all.

In conclusion, MiCA is the first major regulation for crypto but not necessarily the best. It removes the things that make crypto what it is. Security, privacy, decentralisation and being easy to build on. The new Transfer of Funds regulation removes privacy and the mandatory licences removes being easy to build on. That leaves security and decentralisation, but if you are trusting a crypto operator with details that can identify you is it really secure or decentralised at all? 

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This is was not intended to be investment advice! The article you have just read was written by an incompetent fool. Please always double check the facts and do your own research.