Representatives of the European Union’s main institutions and member states have reached agreement on proposed crypto asset market regulations. Negotiations over a comprehensive legal framework for the EU’s crypto space are progressing after European authorities agreed earlier this week to adopt anti-money laundering rules for cryptocurrency transactions.
The EU Parliament, Council and Commission agree to tame the “Wild West” crypto market
Negotiators representing the European Union’s major institutional bodies have agreed to implement legislation for a landmark crypto asset market (MiCA) across the 27-strong bloc. This will introduce safeguards for the licensing of crypto companies and their customers. This agreement follows the consensus on anti-money laundering regulations for cryptocurrencies.
Behind the agreement are the three participants in the EU’s complex legislative process: the European Parliament, the European Commission, and the Council; MiCA will now need the approval of the Parliament and national governments before it can become law. The breakthrough of the tripartite meeting was announced on social media by the package’s rapporteur, Stefan Berger,
“Europe is the first continent with crypto asset regulation,” Berger exclaimed in a tweet, noting that controversial proposals to ban technologies such as energy-intensive proof-of-work (PoW) mining were not included in the latest draft. Quoting from Reuters, the German center-right lawmaker who led the negotiations also stated.
Today we put order in the Wild West of crypto assets and set clear rules for a harmonized market. Recent declines in the value of digital currencies show that they are very risky and speculative, and teach us that it is fundamental to act.
Crypto markets have beendepressed this year following the collapse of the Terraced (UST) stablecoin last month and serious problems at major crypto companies such as Celsius Network, 3AC, and Voyager Digital. Bitcoin (34} BTC), the cryptocurrency with the largest market capitalization, has lost 70% of its value since its record high in November. At the time of this writing, it is trading at just over $19,000 per coin
MiCA Improves Customer Protection in the European Crypto Space
This important regulation confirms the European Union’s role as a standard-setter for digital issuance, says the EU MiCA will provide crypto issuers and related service providers a “passport” to serve customers across the EU, while requiring them to meet “strong requirements to protect consumers’ wallets and become liable for lost investors,” the statement stressed.
Additionally, stablecoin holders will be offered the security of free billing at any time. The move could lead to a situation where, according to some in the industry, such as the Blockchain for Europe lobby group, “stablecoins basically have no way to profit.”
The agreement excludes non-fundable tokens (NFTs) “unless they fall into an existing crypto asset category.” Authorities in Brussels will now have 18 months to decide whether another regulation is needed for them.
National regulators are responsible for issuing licenses to crypto businesses. At the same time, they must regularly inform the European Securities and Markets Authority (ESMA) about the authorization of large businesses.
The latter is tasked with developing standards for crypto companies to disclose information on their environmental and climate footprint, a compromise arrangement that would allow scrapping the idea of prohibiting PoW coins from providing services.
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