Original text: Cryptonews
Translation: Yuliya, PANews
With the arrival of 2025, the European cryptocurrency market is set to undergo significant changes. While global attention often focuses on the developments in the U.S. cryptocurrency market, the trajectory of the European market in the coming year is also worthy of close attention. Particularly, with the much-anticipated regulation of crypto assets (MiCA) set to be fully implemented across the EU by December 30, 2024, the market landscape will undergo substantial changes.
The introduction of the MiCA legislation has already had a significant impact on the stablecoin market, especially as there have been many recent questions regarding USDT in the market. In response, Tether's CEO has shared multiple clarifications on the social platform X, emphasizing that the reality is '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 destination. She pointed out:
Jurisdictions that can efficiently adopt MiCA (EU Regulation on Crypto Assets) and provide a business-friendly environment are expected to become important cryptocurrency centers, with Germany and France as strong contenders. At the same time, 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 businesses to operate across the trading area once they obtain regulatory approval in one member state through a 'passport' system. EUCI predicts that by 2025, Europe will form a 'more mature and standardized cryptocurrency market,' providing legal certainty and confidence for institutional and retail investors while promoting the adoption of blockchain technology.
Due to the rise of the cryptocurrency market, retail participation has recently increased. The approval of ETFs and the change of the U.S. government have brought optimism to investors. Nevertheless, considering the historical volatility of the market, we believe that most retail cryptocurrency investors still hold a cautious attitude.
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 historical high of Bitcoin is a strong indicator of the growing trust and attention towards digital assets. This wave of increase, combined with the upcoming implementation of MiCA regulations in Europe, marks a critical moment for the industry, bringing an urgently 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 of EUCI predicts that the regulation may cause 'considerable confusion' during its implementation. She noted that the 27 EU member states may have differing interpretations of the regulation, which will challenge regulatory consistency.
There is also significant uncertainty in determining which projects and assets fall under the scope of MiCA regulation, particularly regarding which can be considered 'fully decentralized.' In addition, there is no consensus in the industry on the definition of NFTs, which creates ambiguity about 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 publicly issuing tokens, which may increase compliance difficulties for small projects and emerging initiatives, thereby stifling innovation. Additionally, EUCI predicts that a large number of tokens may be delisted from centralized platforms due to failing to meet regulatory standards. This change could reduce the variety of stablecoins available to retail investors on exchanges, thereby affecting market liquidity and accessibility.
Furthermore, 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 companies, while potentially leading to some companies or products exiting the market. Although MiCA largely excludes DeFi from direct regulation, its interfaces or service access points may face additional regulation from member states, creating uncertainties that could lead to friction. (Related reading)
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 and warning that the launch of a digital euro could lead to a 'dystopian world.' Markezic stated that this idea is innovative but quite controversial within the EU's conservative financial environment. She believes that this proposal requires comprehensive discussion, focusing on analyzing its potential benefits and risks, especially the strategic importance of Bitcoin and other crypto assets and the EU's positioning in global competition.
The MiCA regulations introduced by the EU were seen as key to attracting crypto businesses, especially against the backdrop of the U.S. Securities and Exchange Commission regulating through enforcement. However, as Trump is set to return to the White House and promises to provide a more lenient environment for the crypto industry, the EU's attractiveness may be affected.
(The above content is excerpted and reprinted with authorization from partner PANews, original link)
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"How will the EU MiCA legislation affect the cryptocurrency market?" This article was first published on (Blockke).