Original: Cryptonews
Translated by: Yuliya, PANews
As 2025 approaches, the European cryptocurrency market is set to undergo significant changes. While global attention often focuses on developments in the U.S. market, the evolution of the European market in the coming year is also worthy of close attention. Especially with the highly anticipated Crypto Assets Market Regulation Act (MiCA) set to be fully implemented across the EU on December 30, 2024, the market landscape will undergo significant changes. The introduction of this act has already had a significant impact on the stablecoin market, particularly with recent questions raised 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 destination. She pointed out:
“Jurisdictions that can efficiently adopt MiCA (EU Crypto Assets Market Regulation Act) and provide a business-friendly environment are expected to become important cryptocurrency hubs, with Germany and France as 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, allowing companies to conduct business throughout the trading zone once they obtain regulatory approval in one member state through a 'passport' system. The EUCI expects that by 2025, Europe will develop a 'more mature and regulated cryptocurrency market' that provides legal certainty and confidence for both institutional and retail investors while promoting the adoption of blockchain technology.
“Due to the rise in the cryptocurrency market, retail participation has recently increased. The approval of ETFs and the change in the U.S. government has brought optimism to investors. Nevertheless, considering the historical volatility of the market, we believe that most retail cryptocurrency investors 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 historical high of Bitcoin is a strong indicator of the growing trust and attention on 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 promises greater clarity, security, and stability.”
Challenges of MiCA
Although MiCA is seen as a step in the right direction, EUCI's Marina Markezic anticipates that the regulation may cause 'considerable chaos' during implementation. She pointed out that the 27 EU member states may have differing interpretations of the regulation, which will pose challenges for regulatory consistency.
“There is also considerable uncertainty in determining which projects and assets fall under MiCA's regulatory scope, especially regarding which can be considered 'fully decentralized.' Additionally, there is a lack of consensus on the definition of NFTs within the industry, leading to ambiguity about whether certain tokens are subject to MiCA regulation.”
Markezic noted 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 initiatives, thereby stifling innovation. Additionally, EUCI predicts that many tokens may be delisted from centralized platforms due to an inability to meet regulatory standards. This change could result in a reduction in the types of stablecoins available to retail investors on exchanges, thereby impacting market liquidity and accessibility.
Additionally, she predicts that MiCA could accelerate the institutionalization and integration of the EU crypto market, driving mergers and acquisitions between traditional finance and crypto-native companies, while potentially leading to the exit of some companies or products from the market. Although MiCA largely excludes DeFi from direct regulation, its interfaces or service access points may face additional regulation from member states, and this uncertainty could cause 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 warned that the launch of a digital euro could lead to a 'dystopian world.' Markezic noted that this idea is innovative but controversial in the EU's conservative financial environment. She believes that this proposal needs 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 regulation launched by the EU was once seen as key to attracting crypto companies, especially in the context of the U.S. Securities and Exchange Commission regulating through enforcement. However, with Trump set to return to the White House and promising a more lenient environment for the crypto industry, the EU's attractiveness may be affected as a result.
