The European Union's recent approval on April 20 of its Markets in Crypto Act (MiCA) could be a major milestone for the cryptocurrency industry, according to a new report from Clyde & Co.
The report, authored by partners Helen Bourne and Rachel Cropper-Mawer, along with chief legal officer Chander Agnihotri, notes that when implemented in 2024, MiCA is likely to represent the most comprehensive regulatory framework for crypto assets, harmonizing the regulatory position across the whole EU. and lay the groundwork for future crypto regulation globally.
According to Clyde & Co: “The crypto industry remains a largely untapped market for insurers. The lack of regulation has been a key factor in the caution shown by many insurers when offering coverage within the sector. As a result, several cryptocurrency companies have been forced to opt for captive insurance or other self-insurance options. However, MiCA represents a potential game changer that introduces much-needed regulatory oversight and market stability to the sector.
“Increased regulation is also expected to encourage traditional financial providers and other big-name companies to move into the space (as was the case before the 'crypto winter'). Such companies are likely to view crypto insurance as a key part of their risk mitigation strategy and may indeed be required to obtain adequate coverage as a result of a regulatory requirement. Therefore, MiCA could very possibly be the catalyst that leads to the opening of the crypto sector to the insurance industry.”
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