Global stablecoin regulation will take a crucial step forward with Europe’s upcoming regulatory framework, according to Binance, the world’s largest cryptocurrency exchange, reports Cointelegraph.
The European Union’s Markets in Crypto-Assets Regulation (MiCA) bill is the first comprehensive regulatory framework for crypto, which could legitimize the industry for lawmakers globally.
MiCA will be a “critical element” for the development of a comprehensive, global stablecoin regulation, according to a Binance spokesperson, who told Cointelegraph:
“By setting clear rules on issuance, reserve management, and redemption, MiCA enhances market stability and consumer protection, while also fostering innovation through legal certainty.”
MiCA’s comprehensive approach will serve as a “global benchmark” for other jurisdictions that may look to align their own frameworks with MiCA for more “cross-border compatibility,” said the Binance representative.
The MiCA framework, which impacts crypto-asset service providers, is set to go into full effect on Dec. 30. Some large European financial institutions are already preparing their digital asset offerings.
While MiCA specifies that fully decentralized digital assets are outside its scope, some decentralized finance (DeFi) protocols include centralized intermediaries, which could make the framework relevant in those cases.
However, a Binance report on global stablecoin regulations shared with Cointelegraph suggests that a strict implementation could impose additional difficulties for stablecoin providers.
