MiCA could boost crypto investment despite concerns over regulation

Europe’s Markets in Crypto-Assets Regulation (MiCA) is being seen as a major milestone for the cryptocurrency sector, despite ongoing concerns about potential overregulation in its early stages.

MiCA, the first comprehensive regulatory framework for crypto assets, officially came into effect for crypto-asset service providers on December 30, 2024.

While some fear regulatory overreach, many experts believe the regulation will have a positive impact on the industry in the long run.

Dmitrij Radin, founder of Zekret and CTO of Fideum (CRYPTO:FI), believes that MiCA will ultimately benefit the cryptocurrency market.

“Long-term, [MiCA is] absolutely positive. Every regulation helps us to mature the market. It will drive more funds and more users,” he stated.

Radin emphasised that MiCA is aimed at addressing weaknesses in the crypto space, which could result in more stringent scrutiny of retail investors and crypto platform users.

Radin further explained that, during the initial phase of implementation, retail investors might feel the most significant impact.

Many users will be required to provide additional personal and financial data to comply with MiCA’s rules.

“Retail users will be way more obligated to provide information, data which will be screened. They will be accounted for. Most Europeans will see taxation,” Radin noted.

The implementation of MiCA also raises concerns regarding enforcement actions against blockchain protocols that fail to meet its standards.

Early enforcement may lead to legal cases against noncompliant platforms.

Some financial institutions are already adjusting to the new regulatory landscape.

Societe Generale has partnered with Bitpanda to launch a MiCA-compliant stablecoin, EUR CoinVertible (CRYPTO:EURCV).

Additionally, MoonPay secured MiCA approval in the Netherlands on December 30, 2024.