MiCA: A Catalyst for Increased VC Funding in European Crypto Startups
The European Union’s new regulatory framework for crypto, MiCA, will make European crypto startups far more attractive to investors, one expert has argued.
Writing on Twitter last week, Patrick Hansen, Director of Strategy and Policy at USDC-issuer Circle, said that “the MiCA effect” can already be seen in investments flowing into European crypto firms.
“The share of VC investment into European crypto projects is up almost 10x in one year - from a share of 5.9% in Q1 2022 to 47.6% in Q2 2023,” Hansen wrote in the tweet, while noting that this is largely thanks to the regulatory clarity the new law has provided.
He went on to call the new law a “great development for crypto in Europe.”
MiCA, which is short for Markets in Crypto Assets, is a new and comprehensive regulatory framework for crypto in the EU.
The EU first reached an agreement on MiCA in July last year. The bill aims to regulate all crypto-related activities within the EU territory, with a special focus on the issuance of various digital tokens.
It will also bring much more stringent oversight for companies that are defined as crypto-asset service providers (CASPs), which includes many different of crypto custody providers.
The bill was passed by the European Parliament in March this year, after first passing a vote in the European Council in October last year.
In October last year, Circle’s Hansen said during a summit in Brussels that the new law means we now have “a regulated path for stablecoins in Europe.”
He added that Circle plans to make its existing euro-backed stablecoin fully compliant with the new regulations, and said incentives for using its Euro Coin (EUROC) will now grow given that the euro is the second-most used currency worldwide.
Still, Circle and
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