As the MiCa Legislation Nears, the European Commission Warns That It Might Breach Trade Law

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The MiCa legislation is reaching final stages, sparking concerns that it could breach international trade laws. Per CoinDesk’s report, a document from the European Commission raises serious doubts about the proposed EU ban on tax-have crypto firms. It will most likely be voted by the EU Commission into law, but if you take a deep look at the documents, it doesn’t fairly ban trades from firms in tax-haven countries.

The EU considers countries such as Panama and El Salvador ‘shady’ jurisdictions, putting them on the blacklist for tax evasion. EU lawmakers are trying to block crypto-asset providers from offering services in these countries, yet according to some Commission officials, this shouldn’t happen.

What Is MiCa?

Short for Markets in Crypto-assets, the MiCa legislation was first introduced in 2020. It’s a sound legal framework as the EU calls it that will clearly define the regulatory treatment of crypto assets not covered by existing financial services regulations. The law will apply within the EU. It’s the first Bitcoin and crypto regulation in the European Union, but just because it’s revolutionary doesn’t mean it’s good.

An EU Commission paper has raised doubts about this kind of legislation, citing that no such prohibition exists in other sectoral legislation. Lawmakers have also said that it’s not clear why it only applies to cryptocurrencies. Such a law could create barriers to EU services, effectively resulting in breach of international trade laws.

Numerous officials have expressed their concern with the law which should be regulated by the EU securities watchdog ESMA. The paper expressed further concern about the clarity of the criteria, saying they were unclear. Lawmakers are urging the EU to reconsider its stance on MiCa. Many believe that a redraft of the anti-money laundering act will serve better for this purpose than the controversial MiCa legislation.

CAR Adopts Bitcoin as Currency; El Salvador Continues Buying the Dip

The fact that El Salvador has been demonized by the EU, the USA, and the IMF hasn’t stopped president Nayib Bukele from expanding the country’s official Bitcoin reserves. He has just bought the most recent dip and made millions when the cryptocurrency went up, although to be fair, that was followed by another dip.

El Salvador doesn’t care for the bans and blacklists, choosing to continue with the Bitcoin experiment. The Central African Republic has joined it as the second country to officially introduce Bitcoin as legal tender. The bill was passed a few days ago facing strong opposition from other central African states.

Of course, the CAR is under scrutiny from the IMF for this move, and other countries have also expressed their concern about it. The country’s crypto bill was voted with unanimous support, offering a regulatory framework that should boost CAR’s flailing economy. It has one of the world’s least-developed economies and is financially struggling due to armed conflicts in the past decade.

The government’s hoping that Bitcoin can come to the rescue, although it remains to be seen how the experiment works considering how big of a problem Internet connection is in the country.