Industry insiders suggest that the approval of the Markets in Crypto Assets (MiCA) regulation by the European Parliament creates opportunities for bitcoin-related firms to access a wider range of banking services. This move is expected to encourage previously hesitant banks to engage with licensed entities in the industry.
However, uncertainties persist regarding the precise details of implementation and the coverage of certain digital asset sub-sectors excluded from this significant legislation.
According to MiCA, Crypto Asset Service Providers (CASPs) intending to cater to clients within the EU must obtain licenses from national authorities.
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In a recent interview with Chainalysis, Simon Ousager, the co-CEO of fintech startup Januar, highlighted that the lack of clear regulations regarding digital assets had led numerous banks to avoid engaging with these firms. Consequently, many companies within the sector were left without access to banking services.
Januar stated in April that they had achieved a significant milestone by obtaining a payment institution license from the Danish Financial Supervisory Authority (DFSA). This license enables Januar to onboard clients throughout Europe, facilitating their operations in the region.
Digital asset firms have traditionally sought out a limited number of forward-thinking banks and fintech companies that were open to providing services to them. However, recent developments have further reduced the already limited pool of banking partners available to these companies.
The aftermath of the bitcoin price peak in late 2021 was further intensified by the collapse of FTX, a prominent digital asset exchange, in November. Additionally, the struggles faced by Silvergate Bank and Signature Bank earlier this year contributed to a decline in the number of available banking institutions that digital asset firms could rely on.
Read more on the subject : After The FTX Fraud, It’s Time to Be Even More Bullish on Bitcoin
Joey Garcia, the head of public affairs at Xapo Bank based in Gibraltar, shared that sentiment, emphasizing the importance of building trust in the industry for its growth. Garcia anticipated that banks would adopt a more proactive stance in offering services to businesses that adhere to certain standards.
MiCA is poised to elevate the regulatory standards for digital asset businesses which currently operate under a relatively straightforward registration system primarily focused on compliance and anti-money laundering, according to Garcia.
According to the European Parliament, implementation of MiCA will subject crypto asset service providers (CASPs) to additional requirements pertaining to governance and liquidity, raising the overall industry standards.
On May 16, the European Union Finance Ministers voted unanimously to approve the MiCA regulation. This establishes a comprehensive legal framework at the EU level for this sector. This marks the first time such a framework has been implemented.
Elisabeth Svantesson, Minister for Finance of Sweden stated in a press release:
I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector. Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism.