The European Parliament and the Council Presidency have agreed upon landmark crypto regulation, with negotiations resulting in the Markets in Crypto-Assets (MiCA) proposal, which will provide clear rules for crypto issuers, and focuses heavily on the regulation of stablecoins.
EU officials structured the MiCA proposal after negotiations took place in Brussels on Thursday, with the aim of increasing the regulatory purview of cryptocurrencies in Europe, particularly stablecoins and crypto asset issuers.
The press release outlining the negotiations of the MiCA agreement has set out the structuring of a register of non-compliant CASPs, specifically “those operating in the EU without authorisation or those who bypass the regulation.” The register set out in the proposal would enable authorities to shut down non-compliant CASPs and support efforts to support data protection and fight money laundering.
The European Parliament’s Committee on Economic and Monetary Affairs drafted the MiCA regulation package in April after the first proposal to introduce MiCA in September 2020. The MiCA proposal is the first comprehensive regulation of digital assets in Europe.
Ernest Urtasun, Greens/EFA Vice President and Shadow Rapporteur on the Markets in Crypto Assets Regulation, noted:
“MiCA will be the first comprehensive regime for crypto-assets in the world and will contain strong measures to guard against market abuse and manipulation. The crypto sphere is rife with risk and open to abuse and attack. We want to ensure that investors will have guarantees of protection for their assets and privacy, and that we avoid cases like the recent crypto-crash with retail investors losing all their money because of badly designed products or scams. Crypto-asset service providers (CASPs) operating in the EU will now be subject to EU rules.”
Stefan Berger, a member of the Christian Democratic Union (CDU), was the lawmaker who led negotiations on behalf of the European Parliament strongly opposed a ban on proof-of-work (PoW)-based assets such as Bitcoin during the negotiations, and was the representative appointed to report on the outcome of the proposed bill:
“Today, we put order in the Wild West of crypto assets and set clear rules for a harmonized market that will provide legal certainty for crypto asset issuers, guarantee equal rights for service providers and ensure high standards for consumers and investors,”
In line with the newly agreed upon rules, stablecoins will be required to maintain sufficient reserves to support mass withdrawals, and they will also face a cap, limited to 200 million euros in transactions per day. In addition, The European Securities and Markets Authority (ESMA) will be given additional powers to restrict or ban crypto platforms that do not protect their investors.
The proposal will also address environmental concerns of cryptocurrency, with crypto issuers being required to declare their environmental and climate footprint.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2022/07/landmark-mica-regulation-package-approved-eu-regulators