Clyde & Co: EU’s MiCA could open up crypto market
The European Union’s recent passage on April 20 of its Markets in Crypto Act (MiCA) could be an important milestone for the crypto sector, according to a new report from Clyde & Co.
The report, written by partners Helen Bourne and Rachel Cropper-Mawer, along with legal director Chander Agnihotri, points out that when implemented in 2024, MiCA is likely to represent the most comprehensive regulatory framework for crypto assets, harmonising the regulatory position across the EU and laying the foundations for future crypto regulation globally.
According to Clyde & Co: “The crypto-industry remains a largely untapped market for insurers. Lack of regulation has been a key factor in the caution that many insurers have displayed with regard to offering cover within the sector. As a result, a number of crypto-businesses have been forced to opt for captive insurance or other self-insurance options. However, MiCA represents a potential sea-change that introduces some much needed regulatory oversight and market stability into the sector.
“The increase in regulation is also expected to encourage traditional financial providers and other reputable businesses to move into the space (as was the case prior to the ‘crypto winter’). Such businesses are likely to see crypto-insurance as a key part of their risk mitigation strategy and may, in fact, be required to obtain suitable cover as a result of regulatory requirement. Therefore, MiCA could quite possibly be the catalyst that leads to the opening up of the crypto-sector to the insurance industry.”