Ukraine has announced that it will adopt the Markets in Crypto-Assets (MiCA) regulation recently passed by the European Parliament. The move was confirmed by Yaroslav Zheleznyak, Deputy Chairman of the Tax Committee of Ukraine, who said on his Telegram channel on April 20 that the regulators are “already working on implementing some provisions of MiCA to make crypto assets legal in Ukraine.”
The MiCA regulation is a major milestone for the crypto industry in the European Union, as it aims to introduce uniform regulations and create standardized rules for crypto assets across the EU, thus reducing the burden of compliance on crypto businesses that are currently required to adhere to 27 distinct regulatory frameworks across EU member countries. The implementation of MiCA is expected to enhance the competitiveness of startups in the EU, which could lead to a rise in their market share as compared to unregulated competitors.
Ukraine’s move to adopt the EU regulations comes after the Eastern European country received candidate status to the EU in June 2022. The European Council had “acknowledged the considerable efforts that Ukraine has demonstrated towards meeting the objectives underpinning its candidate status for EU membership.”
The EU parliament passed the MiCA legislation with a huge margin of 517-38 and 18 abstentions, making it the first major jurisdiction in the world to introduce a comprehensive crypto law. The Transfer of Funds regulation (TFR) was also passed, mandating crypto operators to identify their customers in a bid to halt money laundering.
The MiCA regulation would require crypto wallet providers and exchanges to seek a license to operate across the continent and require issuers of stablecoins tied to the value of other assets to maintain sufficient reserves. The regulation is also expected to create a more level playing field for crypto businesses across the EU, thereby boosting investor confidence and attracting more capital into the sector.
While the executives in the crypto industry have largely supported the legislation, some have also expressed their counter-opinion, suggesting additions or highlighting its inadequacy. Christine Lagarde, president of the European Central Bank (ECB), called for the “MiCA II” bill, which would control the activities of crypto-asset staking and lending, which are undoubtedly rising.
The implementation of the MiCA regulation is expected to have a significant impact on the crypto sector, not only in the EU but also globally. With the EU setting the standard for regulatory compliance in the sector, other jurisdictions are expected to follow suit, either by adopting similar regulations or by aligning their existing regulations with those of the EU. This could lead to a more streamlined and transparent crypto industry, which could, in turn, attract more institutional investors into the sector.