This article examines the differences in crypto asset regulation between the European Union and the United Kingdom, as well as their influence on the future of the crypto market.
MiCA Regulation in the EU
The Markets in Crypto-Assets (MiCA) regulation provides a unified legal framework for all 27 EU member states, creating harmonized rules for crypto assets. Its main advantage is the 'passporting' mechanism, allowing crypto companies to offer services in all EU countries after obtaining a license in one. This simplifies business scaling, eliminating the need for re-legalization in each country.
UK's Approach to Crypto Asset Regulation
The UK, while lacking a unified law, is moving towards establishing a legal framework for crypto assets through its 'Plan for Change' initiative. The main goal is to protect users by setting clear risk disclosure requirements and terms of service for crypto assets. This could significantly influence the crypto market in the UK.
Choosing a Domicile for Crypto Funds
Given the regulatory differences, the decision of where to establish a crypto fund becomes a strategic question. MiCA provides a stable compliance environment for crypto companies in the EU, making countries like Luxembourg attractive for fund establishment. Meanwhile, the UK's flexibility and willingness to experiment with new products could also draw numerous projects.
Both models have their pros and cons, and ultimately they may complement each other in shaping the future of digital assets.
