Original text: Cryptonews
Compiled by: Yuliya, PANews
With the arrival of 2025, the European cryptocurrency market is about to undergo significant changes. While global attention often focuses on developments in the US market, the growth trajectory of the European market over the next year is also worthy of close observation. In particular, with the highly anticipated regulation on crypto assets (MiCA) set to be fully implemented across the EU on December 30, 2024, the market landscape will undergo significant changes. The introduction of this regulation has already had a major impact on the stablecoin market, especially with the recent emergence of skepticism regarding USDT. In response, Tether's CEO shared multiple clarifications on social media platform X, emphasizing that the reality is that USDT will not be deemed illegal in Europe.
Significant changes will emerge 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 business and investment destinations. She pointed out:
'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 centers, with Germany and France being strong competitors. At the same time, countries such as Estonia, Malta, or Portugal may leverage their flexible regulatory processes and competitive tax policies to attract global participants.'
Markezic explained that MiCA provides a unified regulatory framework, allowing businesses to operate across the entire trading area once they obtain regulatory approval in one member state through a 'passporting' system. EUCI expects that by 2025, Europe will form a 'more mature and regulated cryptocurrency market,' providing legal certainty and confidence for both institutional and retail investors while promoting the adoption of blockchain technology.
'Due to the recent rise in the cryptocurrency market, retail participation has increased. The approval of ETFs and the change in the US government have brought optimism to investors. Nevertheless, considering the historical volatility of the market, we believe that most retail investors in cryptocurrencies remain cautious.'
Erald Ghoos, General Manager of OKX Europe, believes that 2025 will be a key year for the transformation of the cryptocurrency industry, especially in Europe.
'The recent all-time high of Bitcoin is a strong indicator of the growing trust and attention towards digital assets. This wave of growth, combined with the upcoming implementation of MiCA regulations in Europe, marks a pivotal moment for the industry, bringing a much-needed framework that is expected to provide greater clarity, safety, and stability.'
Challenges of MiCA
Although MiCA is seen as a step in the right direction, EUCI's Marina Markezic predicts that the regulation could cause 'considerable confusion' during implementation. She pointed out that the 27 member states of the EU may interpret the regulation differently, leading to challenges in regulatory consistency.
'There is considerable uncertainty regarding which projects and assets fall under the scope of MiCA regulation, particularly the contentious issue of what can be considered 'fully decentralized.' Furthermore, there has been no consensus within the industry on the definition of NFTs, leading to ambiguity regarding whether certain tokens are subject to MiCA regulation.'
Markezic stated that this is important; the new regulations require projects to prepare a white paper before publicly issuing tokens, which may increase compliance difficulties for small projects and emerging plans, thus stifling innovation. Additionally, EUCI predicts that a large number of tokens may be delisted from centralized platforms due to failure to meet regulatory standards. This change could reduce the variety of stablecoins available to retail investors on exchanges, thereby affecting market liquidity and accessibility.
Additionally, she predicts that MiCA may accelerate the institutionalization and consolidation of the EU's crypto market, driving mergers and acquisitions between traditional finance and crypto-native enterprises, while also potentially leading to the exit of certain companies or products from the market. Although MiCA largely excludes DeFi from direct regulatory scope, its interfaces or service access points may face additional regulations from member states, creating potential friction due to this uncertainty.
Europe's Bitcoin strategic reserve
EU Member of Parliament Sarah Knafo recently proposed establishing a Bitcoin strategic reserve in Brussels, stating that this move could emulate Trump's policies and warning that the launch of the digital euro may lead to a 'dystopian world.' Markezic noted that this idea is innovative but controversial in the conservative financial environment of the EU. She believes that this proposal requires comprehensive discussion, focusing on analyzing its potential benefits and risks, particularly the strategic importance of Bitcoin and other crypto assets, as well as the EU's positioning in global competition.
The MiCA regulations launched by the EU were seen as key to attracting crypto businesses, especially in the context of the US SEC's enforcement-based regulation. However, with Trump's imminent return to the White House and his promise to provide a more lenient environment for the crypto industry, the EU's appeal may be affected.
