On December 30th, the next component of the Markets in Crypto-Assets (MiCA) regulation officially came into force, drastically changing the approach to cryptocurrency regulation in the European Union. Here’s what changed:
If the transaction exceeds 1000 euros, mandatory verification of the wallet owner is required through the KYC (Know Your Customer) procedure. This means that the personal data of the owners must be tied to the wallet. However, it is not yet known whether the verification will be required before each transaction, or whether a one-time confirmation of wallet ownership will be sufficient. It is also not clear how transfers between different exchanges will be handled.
A complete ban on anonymous cryptocurrency payments aims to combat money laundering and terrorist financing, but it could limit access to decentralized financial services (DeFi).
Ban on stablecoins. From 2025, fully algorithmic and some other stablecoins such as Tether (USDT) will be banned from trading in the EU due to non-compliance with MiCA.
Cryptoasset issuers will have to obtain a license, create detailed white papers (project descriptions), and adhere to strict risk management and reporting requirements. This could lead to less competition in the market, as smaller companies may not be able to financially afford these procedures.
Decentralized exchanges (DEXs) may become more popular to avoid unnecessary scrutiny, although their status may also change in the future. More people will also start turning to mixes to hide transaction history, but this may raise suspicions among regulators. Crypto enthusiasts may switch to alternative assets, such as anonymous cryptocurrencies. Although Monero (XMR) is already facing bans in the EU.
Meanwhile, Tether has invested in European company StablR, which has an e-money license in Malta. This could help the USDT stablecoin become MiCA-compliant, as StablR already operates under EU regulatory standards.
Also on December 30, MoonPay, an operator of cryptocurrency payment solutions, officially received a license to operate under the EU's MiCA regulations.