EU's New Law for Digital Assets, MiCA, Comes into Effect on Sunday

The Markets in Crypto-Asset Regulation framework (MiCA), a new law regulating digital assets, will come into effect in the European Union on Sunday. Unlike the US, MiCA provides legal and regulatory clarity for the entire digital asset market, aiming to bridge digital assets and the real economy in a typically European way. The law will give euro-denominated stablecoins access to a 441 million-strong consumer market and promote job development and economic competitiveness. However, the EU is already considering MiCA 2.0 to address gaps in the current regime, such as non-fungible tokens and decentralized finance. Meanwhile, the recent crash caused by Terra Luna's lack of adherence to state money transmission laws in the US highlights the need for consumer protection and the US's need to reassert its leadership in financial services regulation and innovation.