With the full implementation of the European Union’s Markets in Crypto-Assets Regulation (MiCA) this December, crypto firms are closely watching how these new rules will shape the industry. MiCA promises to bring much-needed legal clarity and investor protection, positioning Europe as a global leader in crypto regulation. However, as the framework rolls out, its impact could be far-reaching, potentially influencing regulatory approaches across the globe.
Uldis Teraudkalns, the newly appointed Chief Revenue Officer at the crypto exchange Paybis, shared his insights on MiCA’s implications in an interview with TheStreet Crypto. The conversation touched on several points, including Norway’s recent support for MiCA and the challenges countries like Norway could face in attracting crypto firms due to high operational costs and taxes. Teraudkalns also discussed how MiCA’s stringent licensing and compliance requirements might drive some companies to seek more favorable jurisdictions.
According to Teraudkalns, the strict compliance measures introduced by MiCA are likely to push many crypto firms, both small and large, out of the EU. These regulations not only require compliance but also demand substantial investments from companies to meet the new standards. As a result, jurisdictions outside the EU, such as the UK and Switzerland, could become key beneficiaries, depending on how their own regulatory environments evolve.
Teraudkalns emphasized that while the EU market remains valuable, there will likely be migration within Europe to more progressive and cost-efficient jurisdictions. This trend is already occurring, with firms looking to minimize the financial burden of compliance in more expensive regions.
Regarding Norway’s position, Teraudkalns pointed out that although Norway is not an EU member, it is part of the European Economic Area (EEA) and has expressed support for MiCA. However, he raised concerns that Norway’s high costs, along with its aggressive capital and wealth tax systems, could make it difficult to attract crypto businesses. He argued that if Norway adopts MiCA in the same way as the EU, it would not offer any significant advantages over other jurisdictions. Apart from potential access to the EU market through passporting, this approach would provide limited benefits to businesses looking to establish themselves in Norway.
Teraudkalns suggested that jurisdictions like Norway, which face high operational costs, could succeed by offering a more competitive alternative to the EU’s regulatory framework. He pointed to Switzerland’s model, where tailored regulations and lower overhead costs, combined with access to superior infrastructure, have made it an attractive destination for crypto companies. However, the issue of high taxes in Norway could still undermine efforts to foster innovation in the fintech and crypto sectors.
As MiCA’s rules take effect, the EU may see a shift in how crypto firms operate, with some companies choosing to relocate to jurisdictions with more favorable regulations. The long-term impact of MiCA is yet to be seen, but its influence could extend well beyond Europe, potentially reshaping the global crypto landscape.