Original text: Cryptonews
Translated by: Yuliya, PANews
As we approach 2025, the European cryptocurrency market is set to undergo significant changes. While global attention often focuses on developments in the U.S. market, the trajectory of the European market over the next year is equally worth noting. Especially with the much-anticipated regulation on crypto assets (MiCA) set to be fully implemented across the EU on December 30, 2024, the market landscape will change significantly. The introduction of this regulation has already had a major impact on the stablecoin market, particularly with recent doubts about USDT. In response, Tether's CEO has shared multiple clarifications on social platform X, emphasizing that the reality is that USDT will not be deemed illegal in Europe.
There will be 'significant changes' in the future.
Marina Markezic, co-founder of the European Crypto Initiative (EUCI), stated that the implementation of MiCA will prompt EU member states to compete to become the most attractive destination for business and investment. She noted:
Jurisdictions that can efficiently adopt MiCA (EU Regulation on Markets in Crypto-Assets) and provide a business-friendly environment are expected to become important cryptocurrency hubs, with Germany and France being strong competitors. Meanwhile, countries like Estonia, Malta, or Portugal may also leverage their flexible regulatory processes and competitive tax policies to attract global participants.
Markezic explained that MiCA provides a unified regulatory framework that allows companies to operate across the trading zone once they obtain regulatory approval in one member state through a 'licensing passport' system. EUCI expects that by 2025, Europe will form a 'more mature and regulated cryptocurrency market' that provides legal certainty and confidence for institutional and retail investors while promoting the adoption of blockchain technology.
The recent rise in the cryptocurrency market has led to increased participation from retail investors. The approval of ETFs and the change in the U.S. government have brought optimism to investors. Nevertheless, considering the historical volatility of the market, we believe that most retail cryptocurrency investors remain cautious.
Erald Ghoos, the General Manager of OKX Europe, believes that 2025 will be a key year for the transformation of the cryptocurrency industry, particularly in Europe.
The recent historical high of Bitcoin is a strong indicator of the growing trust and attention towards digital assets. This surge, combined with the upcoming implementation of the MiCA regulatory framework in Europe, marks a critical moment for the industry, bringing a much-needed framework that is expected to provide greater clarity, security, and stability.
Challenges of MiCA
Although MiCA is seen as a step in the right direction, Marina Markezic from EUCI expects that the regulation may cause 'considerable confusion' during its implementation. She pointed out that the differing interpretations of the regulation by the EU's 27 member states will pose challenges to regulatory consistency.
There is also significant uncertainty in determining which projects and assets fall under the MiCA regulatory framework, particularly regarding what can be considered 'fully decentralized'. Additionally, there is no consensus within the industry on the definition of NFTs, which has created ambiguity regarding whether certain tokens are subject to MiCA regulation.
Markezic stated that it is important that the new regulations require projects to prepare a white paper before public token issuance, which may increase compliance difficulties for small projects and emerging plans, thereby stifling innovation. Additionally, EUCI predicts that a large number of tokens may be delisted from centralized platforms due to the inability to meet regulatory standards. This change could lead to a reduction in the variety of stablecoins available to retail investors on exchanges, which may subsequently affect market liquidity and accessibility.
Furthermore, she predicts that MiCA may accelerate the institutionalization and integration of the EU crypto market, driving M&A activities between traditional finance and crypto-native enterprises, while potentially leading some companies or products to exit the market. Although MiCA largely excludes DeFi from direct regulatory oversight, its interfaces or service access points may face additional regulation from member states, and this uncertainty may cause friction. (Related Read)
Europe's Bitcoin Strategic Reserve
EU lawmaker Sarah Knafo recently proposed establishing a Bitcoin strategic reserve in Brussels, stating that this move could emulate Trump's policies, warning that the launch of the digital euro could lead to a 'dystopian world'. Markezic mentioned that this idea is innovative but quite controversial within the EU's conservative financial environment. She believes that this proposal needs thorough discussion, focusing on its potential benefits and risks, especially regarding the strategic importance of Bitcoin and other crypto assets and the EU's positioning in global competition.
The MiCA regulation launched by the EU was once seen as a key to attracting crypto businesses, particularly in the context of the U.S. Securities and Exchange Commission's regulation through enforcement. However, with Trump set to return to the White House and promising to provide a more lenient environment for the crypto industry, the EU's appeal may be affected as a result.
