Representatives from key European Union institutions (EU) and member countries reached an agreement about the Markets in Crypto Assets regulatory proposition. The progress in the negotiations over the comprehensive legal framework for the Union’s crypto space comes after earlier this week European officials agreed to adopt a set of anti-money laundering rules for cryptocurrency transactions.
EU Parliament, Council, Commission Agree to Tame ‘Wild West’ Crypto Market
Representatives of major institution bodies in the European Union met to agree on the implementation of landmark Markets in Crypto Assets law (MiCA), which was adopted by the bloc’s 27 members. The agreement will allow crypto companies to be licensed and provide protections for customers. It follows an agreement on crypto-money laundering regulations.
Behind the deal are the European Parliament, Commission, and Council, the three participants in the EU’s complex legislative process. MiCA must now be approved by the Parliament as well as the governments in each state to become law. It was this breakthrough that the trio achieved. announcedStefan Berger (the rapporteur) for the package, posted the information on social media.
“Europe is the first continent with crypto asset regulation,” Berger exclaimed in a tweet while pointing out that a controversial proposal to ban technologies such as the energy-intensive proof-of-work (PoW) mining is not part of the latest draft. Reuters quoted the German center-right lawmaker and mediator who led the negotiations as saying:
We are putting order into the Wild West that is crypto assets, and setting rules to ensure a fair market. We can see how risky and speculative digital currencies are, and it’s imperative to take action.
Crypto markets slumped this year, following last month’s collapse of the terrausd (UST) stablecoin and serious problems at major crypto firms like Celsius Network, 3AC, and Voyager Digital. Bitcoin (BTC), the biggest cryptocurrency by market capital, lost 70% after its record November high. It’s trading at a little over $19,000 per coin at the time of writing.
MiCA to Improve Customer Protection in Europe’s Crypto Space
The important regulation confirms the European Union’s role as a standard-setter for digital issues, the EU said. MiCA will give crypto issuers and providers of related services a “passport” to serve clients across the Union while obliging them to meet “strong requirements to protect consumers’ wallets and become liable in case they lose investors,” a statement emphasized.
Furthermore, stablecoin holders will be offered the security of a free of charge claim at any moment, a move that according to some in industry, such as the Blockchain for Europe lobby group, may lead to a situation in which “stablecoins will basically have no ways to be profitable.”
The agreement excludes non-fungible tokens (NFTs), “except if they fall under existing crypto-asset categories.” Authorities in Brussels will now have 18 months to decide if separate regulations are needed for them.
Crypto-business licenses will be issued by national regulators. The European Securities and Markets Authority will be notified about authorizations for large operators by national regulators.
This group was tasked with developing standards that crypto companies use to share information about their climate and environmental footprints. It is a compromise agreement which allows the abandonment of the proposal to ban services provided for PoW coins.
Which effects will the MiCA have on crypto in the European Union? Please comment below to share your views.
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