PayPal rolled out its crypto service in the US in 2020 and expanded to the UK in 2021. By introducing the service in Luxembourg, the company could end up serving the other 26 countries in the bloc once the Markets in Crypto-Assets (MiCA) regulation comes into effect. According to this regulatory regime, any firm registered in any single member state should receive a licence to offer their services throughout the EU through the ‘passporting’ process.
Once PayPal's crypto service becomes available in Luxembourg, users will be able to buy, sell, and hold cryptocurrencies such as Bitcoin, Ethereum, Litecoin and Bitcoin Cash starting as low as EUR 1 (USD 1.5).
According to coindesk.com, crypto service providers Nexo and Gemini have been approved for registration with an Italian regulator, allowing the platforms to serve customers in the country. The move also comes in the context of the European Union’s bloc-wide MiCA crypto regulatory framework, which should come into effect in 2024.
According to akingump.com, the Markets in Crypto-Assets Regulation represents a piece of wide-ranging EU legislation that was created to regulate crypto-asset-related activities in the European Union. MiCA covers several key aspects such as transparency, disclosure, authorisation, and the supervision of transactions.
The regulation applies to natural and legal persons and other undertakings that are engaged in the issuance, offer to the public and admission to trading of crypto-assets or that provide services related to crypto-assets in the Union.
MiCA, describes a crypto asset as a digital representation of a value or a right which may be transferred and stored electronically, using distributed ledger technology or similar technology. At the time of writing, MiCA has passed through all the stages of the EU’s legislative process, except for European Parliament approval.
In November 2022, in the context of FTX's collapse, the president of the European Central Bank has called for the regulation and supervision of the crypto sector in the EU. The call was made by Christine Lagarde during a hearing of the Committee on Economic and Monetary Affairs of the European Parliament. Lagarde drew a parallel with Facebook’s Libra and offered it as a positive example of the ECB’s involvement, but she also noted that FTX’s situation is different and should be treated as such.
Christine Lagarde also mentioned the potential necessity of a MiCA II framework, which would build on the work lawmakers did for the original bill and would help regulate the activities of crypto asset staking and lending.
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