The EU (EU) is one of the first regions in the world to have drafted and finalized and deployed a series of regulations to oversee the cryptocurrency sector in the region. Under EU mica law that came into effect in December 2024, crypto service providers have received clear instructions on how to conduct business. EU policymakers have now directed companies not to interact with stablecoins that do not formally comply with the group’s mica guidelines.
An official directive recently issued by the European Securities and Markets Authority (ESMA) sets a January 31 deadline for cryptocurrency companies to take action against stable companies that do not comply with mica regulations. It refers to stable tokens (art). Stablecoins are cryptocurrencies that are fixed to the value of reserve assets such as Fiat currency (such as fiat currencies) in a 1:1 ratio.
ESMA has required cryptoasset service providers (CASPs) to conduct appropriate procedures to evaluate the compliance of arts and electronic tokens (EMTS) with MICA regulations. ESMA said in its directive that stabilizers that do not conform to mica should be limited to circulation.
The European Commission finalized the Mica Regulations in 2022, which finally came into effect on December 30, 2024.
Due to their reliance on stable reserved assets, stable stable currencies have emerged in parts of the world, including the UK. They can facilitate large amounts of real-time borderless payments while permanently recording transactions on the blockchain network. Transactions through Stablecoins eliminate the need to process additional payments. They can also be purchased over the long term and held as assets.
ESMA aims to ensure that investors in EU countries are protected by financial scams, fraud and risks and are not conducive to the illicit currency movement. It is responsible for the National Authority (NCAS) to help CASP complete this process to identify and restrict Stablecoins still do not comply with MICA guidelines.
“It is important that the competent national authorities (NCAS) guide them through this process, ensuring that action is always taken throughout the EU and is implemented in an orderly manner. The ESMA Directive states that the NCA is encouraged to cooperate and cooperate in this regard and Coordinate actions.
Crypto businesses also require operations in EU countries to communicate effectively with each other and between the investor community. ESMA believes that CASP should responsibly initiate awareness efforts for investors.
“EU investors should be clearly informed of the restrictions attached to the provision of services involving non-MICA-compliant art and EMTs, as these may result in the execution of investors maintained in such crypto assets The conditions are poor,” ESMA added. .
