European Union Enacts Comprehensive Crypto Regulation with MiCA

The European Union's Markets in Crypto-Assets Regulation (MiCA) has brought a new era of regulation to the digital asset market. Since December 2024, crypto exchanges operating in the EU must obtain licenses from their national financial regulators, demonstrating financial stability, robust governance frameworks, and cybersecurity protocols.

Stablecoin issuers face stricter requirements, including holding full reserves in secure, low-risk assets and segregating them from the issuer's own funds. Non-EU currency stablecoins are subject to transaction caps, aimed at protecting the euro's role in European payments.

The regulation also requires crypto issuers to publish white papers outlining their token's characteristics, risks, and holders' rights. Exchanges must maintain business continuity plans and demonstrate operational resilience, separating customer funds from their own assets.