The upcoming Markets in Crypto-Assets (MiCA) regulatory framework in Europe is poised to reshape the continent’s cryptocurrency landscape. While seen as a positive step towards legitimizing the industry, MiCA could also lead to a mass exodus of crypto firms to regions with more favorable regulations, such as the Middle East.
According to Anastasija Plotnikova, CEO and co-founder of Fideum, a regulatory and blockchain infrastructure firm, MiCA’s stringent compliance requirements could force consolidation among European crypto companies. “I’m afraid it will lead to consolidation between European and American companies, and they will just move somewhere to the Middle East,” Plotnikova told Cointelegraph during the European Blockchain Convention in Barcelona.
The Middle East has emerged as a crypto-friendly haven, with countries like Dubai and Bahrain offering supportive regulatory frameworks and incentives for blockchain businesses. The region’s growing interest in cryptocurrencies and its proximity to Europe make it an attractive destination for firms seeking to avoid the complexities of MiCA.
While MiCA aims to create a level playing field for crypto firms, it could also disproportionately impact smaller players. Plotnikova explained that the regulatory framework’s compliance costs and capital requirements could favor larger, established companies, leading to a more centralized and less competitive market.
“Crypto is becoming just like a TradFi,” she added. “The more money you have, the more assets under management, the easier it is to scale.”
However, not all European crypto firms are pessimistic about the future. Some large financial institutions, such as Societe Generale, are actively preparing for MiCA’s implementation. The French bank recently partnered with Bitpanda to launch a MiCA-compliant stablecoin, the euro-denominated EUR CoinVertible (EURCV).
Also Read: EU Crypto Landscape Set for Shakeup as MiCA Regulations Take Effect
The partnership marks a significant step towards integrating stablecoins into the traditional financial system. Jean-Mark Stenger, CEO of Societe Generale-FORGE, stated that the collaboration would “offer European users a stable, secure, and accessible digital currency.”
As MiCA approaches its full implementation on December 30, the crypto industry is bracing for a period of significant change. The regulatory framework’s impact on European crypto firms remains uncertain, but the potential for a mass exodus to the Middle East is a real possibility.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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