Major fintech players including PayPal and Revolut have written to the EU regulators to give them more time to implement the new regulatory regime.
The Electronic Money Association, which has a lot of major crypto firms as members, has asked the Department of Finance to give them more time to adhere to the new Market in crypto (MiCa) rules. The plea is directed at European institutions, emphasizing the need for 18 months.
Crypto firms ask for more time
Major fintech players including PayPal and Revolut have written to the EU regulators to give them more time to implement the new regulatory regime.
The MiCa rules which is the new EU rulebook on crypto and digital assets harmonises licensing and the regulation of crypto transactions and introduces stricter anti-money laundering requirements. The rules are to come into force in December 2024.
According to the request from the firms, there are concerns about time being a factor to consider in the transition to the new regime. Transition may affect market operations because the regulation impacts a wide variety of activities in digital finance.
The 18-month period is variable by country. Industry representatives are pleading with national authorities to commit to the maximum adjustment window as a result of this uncertainty. They contend that this strategy guarantees thorough and effective compliance.
Read more: MiCA published in EU official journal, marking the start of a new regulatory era
Why time is important
Ireland, home to the European headquarters of crypto giants like Gemini, Coinbase, and Binance, understands this feeling. The 18 months are crucial in the eyes of the nation’s banking regulators. Regulators and Crypto Asset Service Providers (CASPs) are given enough time to prepare for the new environment. According to a sector representative, this stage is crucial for making the necessary preparations to meet the operational and legal requirements of MiCA.
Ireland should maintain the “full 18 months” for crypto asset service providers (CASPs), the EMA told the Department of Finance.
It would “provide adequate time for both CASPs and the regulator to prepare for compliance with, and application of the new regime.“This will promote uniform application of the rules, prevent regulatory arbitrage, and mitigate the potential for market disruption to the benefit of consumers, CASPs, and supervisors, ” said an organisation spokesperson.
Finding the ideal balance between regulation and innovation is one of the most difficult aspects of putting MiCA into practice. Overly onerous regulations can inhibit innovation and impede the growth of the industry given how fast paced and dynamic the crypto market is. Regulators must therefore carefully craft policies that offer sufficient investor protection while not limiting innovation.
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