EU schedules MiCA cryptocurrency law debate

On 18 April 2023, the European Union will debate MiCA and will engage in talks about a controversial law known as the ‘transfer of funds regulation,’ which requires crypto providers to verify the identities of their customers. As far as MiCA is concerned, lawmakers on the parliament’s Economic and Monetary Affairs Committee voted 28-1 in favour of the legislation in October 2022 followed by an endorsement from national diplomats. Under normal parliament procedures the final vote on MiCA will take place just one day after these consultations, on 19 April. 

Under MiCA, crypto companies such as wallets and exchanges will receive an operating licence as long as they meet certain governance and consumer protection norms. The legislation also introduces reserve requirements for stablecoins. Upon approval, the law will be published in the EU’s official journal and will take effect between one and three years later.

MiCA’s final vote was previously postponed

In June 2022, the European Council and European Parliament reached a provisional agreement on MiCA, marking the first comprehensive EU stance on cryptocurrencies. The move came a day after the European Council, European Parliament, and European Securities and Markets Authority (ESMA) finalised measures designed to minimise money laundering in crypto. 

Initially, the bill was supposed to be submitted to a final vote in November 2022, but the vote was delayed to February due to a series of translating issues. In the EU, legal acts such as MiCA are required to be made available in all the bloc’s official languages. Translating the nearly 400-page file into the 24 official languages of the bloc proved difficult, which is why the vote has been postponed once more, this time until April 2023. 

By postponing the vote, EU officials also moved up the time frame for the implementation of MiCA, as European Securities and Markets Authority and the European Banking Authority have 12 to 18 months to draft the technical standards after the bill has been approved. This means that the earliest MiCA legislation could take effect in April 2024. 

Before it can have any true impact, however, the law needs to be signed off by lawmakers and national governments that make up the EU's Governing Council.  Once it does pass, national regulators will have a say when it comes to the law’s interpretation and implementation.