We have the new regulation on crypto currencies, called MICA and, in the crypto world, someone is already saying that with this new law the European Union is committing a suicide. What happens with MICA in Europe is what will probably happen throughout the Western world, including in the USA. Then there will be autonomous States, nations that will regulate themselves, which are probably the ones that will host us, are the ones where we are going to live… I’m kidding. Jokes aside, let’s get to the facts.
The most important topics are: traceability of non custodial portfolios; Taxation; Proof of work and mining.
The good news: this approval of the crypto asset market regulation has arrived, and it does not include any bans for proof of work and mining.
Traceability: This is the most important issue. What will happen? The various exchanges, the various providers, therefore Binance, Kraken, Nexo, then all the CASPs, will be required to collect all information and apply strengthened due diligence measures, with respect to all transfers that will involve non-custodial wallets. Let’s try to change it again: the verification of the identity of the beneficial owner of the non-custodial wallet (it is a contradiction, I understand you, but follow me) will be mandatory for all those transfers that will be made from, or to, the wallet belonging to the CASP client ( crypto asset service provider). The identity verification will take place for all those transactions from something centralized to something decentralized and from decentralized to centralized, because the provider of the centralized will have to communicate the public address of the decentralized from which it receives and to which it sends funds.
Basically, all the traces will be traced. Like traditional ones regardless of whether they are non-custodial wallets or not. The non-custodial wallet will be assigned to the owner of the one he sent, until proven otherwise. Until proven otherwise it means if there is an invoice, if there is a donation, or if there is something else, then it will have to indicate in that deed who the decentralized is. At that point I will follow it all the way, the so-called “traver rule”. This rule requires that information about the originator and beneficiary of the assets, essentially between the wallet sending and the wallet receiving, all travel together within this transaction and be stored in the system on both sides of the transfer.
Moral: the service providers, the so-called CASPs, will be obliged to provide not only the information they currently provide, but also that of the recipient, even that of the non-custodial wallet from which and in which they will arrive that pass from the centralized. All authorities will be able to access this information, in the case of money laundering, in the case of terrorist financing. You are neither recyclers nor terrorists, but this is the essence. This is what the regulation says.
A database will also be created that will take this information and there will also be a register of all non-compliant CASPs, that is, not supervised and who will not operate following these guidelines.
A fairly heated discussion on privacy will open up on this aspect in the coming days. When you hear about privacy in the European Union, it’s a bit like when I hear about democracy, it always has the same effect …
Entry into force of all this regulation? 2024. 24 months. Analysts, the good ones, say the next bullrun, the next halving.
Another important step must be framed within the geopolitical scenario we are facing: the European Parliament has adopted a resolution which envisages – before the entry into force of the MICA – to find a homogeneous line between all the Nations of the European Union in relation to taxation. The problem is that the European Union, in essence, does not exist as a state. It is not like the United States of America, because it does not have a common defense, it does not have a common welfare, it does not have a common tax system. And all of this was represented by various European rulers of nation states, as the need to get to that landing point. But in reality it does not land there, because to take these decisions the European Union must pass through the parliamentary vote, and on some issues it takes unanimity. And then this “unanimity” should be changed, because it doesn’t work, say the various rulers. But to change unanimity, the treaties must be changed. But to change treaties, you have to vote unanimously! So you understand that no solution can be found. This is why it is foreseeable that in the coming months this model of European union could collapse, to give birth to a new one which at that point allows for a vote, but by a majority, on all these issues.
You understand that at Coinratingnews, when we do these analyzes, we represent a 360-degree picture of what is happening and what will happen to the Euro and to the European Union in the coming months. If all this were to happen, the construction of a new Europe will be based on majority and minority principles, no longer on unanimity, and we could see in the future a common taxation also for cryptocurrencies.
We are witnessing, and are actually entering, the new world. In the crypto world we will see some big hurricanes, big storms, in the coming months. Many a few years ago said that this world would have no future. They said they would take it all out. Today the only sensible thing is to say that big events will happen, which could upset many things, but even crypto in the future will no longer exist seems like a really crazy statement in 2022.
