On April 20, the European Parliament officially approved the Digital Asset Markets Act (MiCA) to tighten regulation. This is considered a pioneering move by Europe in the blockchain and digital asset market.
The MiCA Act appears as a panacea for the crypto sector as the risks are mounting. Expected to be implemented from 2024. MiCA is expected to provide legal certainty for digital assets that are not covered by current European financial regulation. Specifically, MiCA will bring all digital asset issuers and service providers (CASPs) into a regulatory licensing framework and create a specific regulatory framework for stablecoins.
Why is MiCA important?
Lawyer Dao Tien Phong – CEO of Investpush Legal, a legal expert of the Vietnam Blockchain Association (VBA) with nearly 20 years of experience in the industry – commented: “The European Union is a political, economic and political union. the most important military in the world. Therefore, MiCA is considered an important breakthrough in digital asset market management in Europe and can therefore be a model influencing regulations and policies on digital asset market management around the world”.
Lawyer Le Tan Nhat – CEO of C-Spaceship, legal expert of Vietnam Blockchain Association also assessed the introduction of MiCA as “a significant step forward in managing the digital asset market in the old continent”. especially when the European cryptocurrency market has seen many scams.
According to lawyer Dao Tien Phong, at the initial stage, the application of MiCA will have negative and positive effects, but the positive will prevail. The first object directly affected may be startups and digital asset service providers in the European region. These entities will have to comply with the new regulations introduced in the MiCA such as registration, client protection, risk management, anti-money laundering, counter-terrorism financing and monitoring reporting obligations. MiCA will certainly increase the financial burden on vendors and startups that will find it difficult to implement. However, in the opposite direction, weak projects will be significantly purified, helping the market become healthier and safer.
Meanwhile, the major beneficiaries are users and investors. The countries in the European Union themselves will benefit by being able to manage and collect taxes on these activities, reducing the economic instability that uncontrolled risks in the digital asset sector have. may happen.
Experience for Vietnam
Currently, Vietnam’s position has not officially recognized crypto-assets as assets or currencies, but Vietnamese regulators are actively studying crypto-assets, specifically Resolution 01/NQ -CP recently on the implementation of the socio-economic development plan, affirming to continue the task of reviewing and completing the legal framework, controlled testing mechanism, electronic money and asset management mechanism. virtual currency. Specifically, the responsibility of researching, building and piloting the use of “virtual money” based on blockchain technology is chaired by the State Bank in the period 2021-2023.
Lawyer Dao Tien Phong commented: “The birth of MiCA is worth it for policymakers to learn from experience when implementing it in practice. There are a few interesting points when studying MiCA that we can learn. Besides, it is also necessary to study the limitations of MiCA such as not explicitly mentioning regulations for decentralized finance (DeFi) and NFT. In particular, NFT is also a token by nature and has long been viewed as a digital asset by default. Or the fact that MiCA regulates token issuers as entities, not token exchanges. These are points that need to be thoroughly studied.”
According to Lawyer Le Tan Nhat, Vietnam can refer to the first MiCA on the management mechanism of digital asset service providers, specifically requiring providers to register and comply with regulations, in order to reduce minimize risks and ensure user safety. Next, it is necessary to create a digital asset market supervisory authority to ensure digital asset service providers comply with regulations and prevent criminal activities and money laundering.
He said the harmonization of legal regulations helps create a safe business and investment environment, attracts foreign investors and helps the digital asset market develop sustainably, especially in the context of Vietnam. moving towards a digital economy and a digital society. There should be regulations on violations, sanctions between civil transactions or criminal regulations to ensure the validity of the digital asset market. In particular, compliance with regulations will help tax authorities to calculate the management of revenue from business activities from crypto-currencies in order to have the most accurate arrears tax schedule.
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When technology supports legal compliance With the introduction of MiCA in the context of the regulator tightening the management of the digital asset market, the appearance of a tool to reduce the complexity of legal compliance in the fields of technology and finance – banking becomes inevitable. Many companies and projects have been established, providing solutions to prevent financial crimes and manage risks, among them Chainalysis, CertiK, CipherTrace, Elliptic… The Vietnam Blockchain Association places the task of legal compliance at a high priority, especially in the fields of technology and finance. In 2023, the ChainTracer Anti-Phishing project, a product of the Vietnam Blockchain Association in collaboration with Anti-Phishing Social Enterprise Co., Ltd., was born. This project provides an open source of data for the community and authorities to search for free, in order to support investigation and verification, thereby contributing to the management and compliance of international AML, creating provide a reference basis for ministries, agencies and sectors to promote the meeting of AML standards in money management activities. According to Mr. Phan Duc Trung – Standing Vice President of VBA, Vietnam does not have a true RegTech product (technology to support legal compliance) to ensure the process meets the regulations of the regulatory agency. He thinks that businesses should focus on RegTech instead of following current trends like Metaverse, GameFi, etc. At that time, developing RegTech Vietnam must go along with promoting the local sandbox. This requires the efforts of all units working with the government. Besides, VBA will join the community and foreign RegTech organizations and enterprises such as Chainalysis, Certik… to learn and exchange experiences. |