| As US lawmakers struggle to reach consensus over an approach to crypto rules, their counterparts in Europe have blessed a piece of digital-asset legislation that forms the most comprehensive attempt to regulate the sector of any developed global economy. Crypto executives globally are paying close attention — even if they see it as a work in progress. The European Union's Markets in Crypto Assets regulation, better known by its acronym MiCA, has been a long time in the making. Development started on the landmark bill in 2020; from there, it received preliminary clearance last summer, and finally won full approval Thursday in a vote by the bloc's parliament. For those unfamiliar, MiCA requires any company offering crypto-related services in the EU to register in one of its member states, receiving permissions that can in turn be passported across the entire bloc (think of it as getting 27 countries for the price of one). Major European financial watchdogs will be in charge of making sure crypto firms comply with the rules, including that they've got adequate risk management and governance processes in place to avoid another FTX-style collapse. After the text is published this summer, firms have another year or two to get to grips with the rules before they are fully enforced. Like most things in crypto, the regulation has failed to keep up with the sector's pace of change. MiCA doesn't cover digital-asset staking and lending, for example — two areas that were catalysts for the sector's downturn in 2022 as platforms like Celsius Network and Genesis Global Holdco folded under the weight of soured prices and daisy-chain defaults. Decentralized finance and nonfungible tokens are also left to the wayside, leading some big European names to already start calling for MiCA 2.0. Core issues remain in the area of stablecoins, where operators will be required to maintain sufficient reserves and face daily trading caps in certain instances. The adoption of the EU's Travel Rule will also undermine the sector's ability to provide anonymity to users, critics have said, forcing exchanges to hand over information on senders and recipients for every transaction to authorities and pay particular scrutiny to self-hosted wallets sending more than 1,000 euros ($1,097). Overall, though, crypto executives say it's better than nothing. The recent US approach of using targeted enforcement action against big companies as a means of outlining how crypto fits into existing regulation has led major players like Coinbase, Circle and Binance to beef up their presences in Europe, with Coinbase's CEO Brian Armstrong on Tuesday stating "anything is on the table" when it comes to its future operational footprint. Keen to still be visible during Europe's big week, Washington hosted its own congressional hearings Tuesday and Wednesday on the role of the Securities and Exchange Commission (including crypto oversight) and future stablecoin legislation. The sessions were more contentious than conclusive, largely landing on party lines. As part of the proceedings, SEC Chair Gary Gensler was criticized over a perceived lack of clarity around crypto rules, which he dismissed, saying the real issue was whether the industry genuinely wants to comply with what he sees as clear guidelines. If crypto wants its own set of rules, though, it will have to wait. Or move to Europe. | 
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