In 2024, the European Union is expected to enforce the Markets in Crypto Assets (MiCA) regulation, leading to collaborative efforts to expand its global impact. Despite this, individual countries will still have distinct characteristics that must be considered. For instance, a company licensed to offer crypto services in Germany and hoping to transact in France will need to address France’s separate KYC and AML requirements.
Consequently, 2024 will be a year of governments ironing out details, generating extensive paperwork and forms among various parties. With the introduction of MiCA, there will be a significant learning curve as companies adapt to the new processes. Moreover, it is anticipated that spot Bitcoin ETFs will be accessible in the EU in 2024, starting with institutions and later extending to retail clients.
The bullish market is likely to expedite the application and approval of spot Bitcoin ETFs. Once implemented, MiCA regulations are expected to facilitate customizations that offer wider access to financial opportunities, such as bilateral agreements with the EU for smaller entities to increase trading volume. Despite the emergence of common themes in crypto regulations across various countries and regions, fully standardized international regulations remain unlikely due to regional economic differences.
As MiCA is implemented, financial institutions may seek sub-custodians to manage their digital assets, allowing for clearer separation of functions and funds. This strategy can provide reassurance about the safekeeping of digital assets and accurate segregation of financial functions. However, it is just one of the many decisions that key stakeholders will face as they navigate the implementation of MiCA and its associated collaborations and customizations.