Representatives of the main institutions of the European Union (EU) and member states have reached an agreement on the proposed regulation of crypto asset markets. The advance in negotiations on the comprehensive legal framework for the Union’s crypto space comes after EU officials agreed to adopt a set of anti-money laundering rules for cryptocurrency transactions.
The EU Parliament, Council and Commission agree to regulate the wild cryptocurrency market.
Negotiators representing the main institutional bodies of the European Union have agreed to implement the Crypto Asset Markets (MiCA) legislation across the bloc of 27. It will introduce licenses for cryptocurrency companies and warranties for their customers. The agreement follows consensus on anti-money laundering regulations for cryptocurrencies.
Behind this agreement are the European Parliament, the Commission and the Council, the three participants in the complex EU legislative process. To become law, the MiCA will now need to be approved by Parliament and state governments. This result was announced on Twitter by Stefan Berger, the project rapporteur.
MiCA Trilog: Durchbruch! Europa ist der erste Kontinent mit einer Krypto-Asset Regulierung. Parliament, Kommission & Rat haben sich auf ausgewogene #Mica geeinigt. Für mich als Berichterstatter war wichtig, dass es hier keine Verbannung von Technologien wie #PoW /1
— Stefan Berger (@DrStefanBerger) June 30, 2022
“Europe is the first continent with crypto-asset regulations“, exclaimed Berger in a tweet, while pointing out that a controversial proposal to ban technologies such as power-intensive proof-of-work (PoW) mining is not part of the latest draft. Quoted by Reuters, the centre-right German lawmaker, who led the negotiations, also said:
Today, we are bringing order to the Wild West of crypto-assets and establishing clear rules for a harmonized market. The recent fall in the value of digital currencies shows us how highly risky and speculative they are and that it is fundamental to act.
Cryptocurrency markets have crashed this year, following the collapse of the stablecoin terrausd (UST) last month and serious problems at major cryptocurrency companies like Celsius Network, 3AC and Voyager Digital. Bitcoin, the cryptocurrency with the largest market capitalization, has lost 70% of its value since its peak in November. It is trading at just over $19,000 per coin at the time of writing.
The MiCA will improve customer protection in the European crypto space
This important regulation confirms the role of the European Union as the standard-setting body for digital broadcasts, the EU said. MiCA will give cryptocurrency issuers and related service providers a “passport“to serve customers across the Union, while forcing them to respect”strong requirements to protect consumers’ wallets and become responsible in case they lose investors“, underlines a press release.
Additionally, stablecoin holders will be offered the security of a free claim at any time, a move that some industry players, such as lobby group Blockchain for Europe, believe could lead to a situation in which “stablecoins will basically have no way to be profitable.”
The agreement excludes non-fungible tokens (NFTs), “unless they fall under existing crypto-asset categories.“Authorities in Brussels will now have 18 months to decide whether separate regulations are needed for them.
National regulators will be responsible for issuing licenses to cryptocurrency businesses. At the same time, they must regularly inform the European Securities and Markets Authority (ESMA) of the authorization of large operators.
The latter was tasked with developing standards for crypto companies to disclose information regarding their environmental and climate footprint, a compromise arrangement to scrap the idea of banning the provision of services for PoW currencies.
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