European Union lawmakers have signalled their continuing support for the MiCA regulation (Markets in Crypto Assets), which would introduce the first-ever common licensing regime for crypto wallets and exchanges (and OTC) to operate across the EU. The proposed legislation has been widely welcomed, with legislators from the European Parliament’s biggest political groupings expressing their approval in a recent debate.
The law would allow crypto exchanges and digital wallet companies to offer regulated services across the bloc and require stablecoin issuers to hold sufficient reserves. The legislation also includes provisions aimed at protecting consumers, preventing market abuse, and curbing money laundering.
Speakers from the parliament’s biggest parties, the European People’s Party, Socialists and Democrats, Renew Europe and European Conservatives and Reformists welcomed the proposals. Assuming that all members of the supporting parties vote accordingly, the legislation is expected to pass comfortably, putting the EU at the forefront of the token economy.
Lidia Pereira of the center-right EPP, which makes up the largest political group in the European Parliament, told lawmakers that “Europe can be proud of the step we’re taking today.”
German center-right lawmaker Stefan Berger, who led the parliament’s negotiations on the law, said that MiCA regulation should restore trust in the sector after recent high-profile collapses and bring stability to the sector.
The EU’s Mairead McGuinness added that recent events have highlighted the need for stringent rules and supervision. McGuinness cited the collapse of crypto companies such as FTX, Celsius Network, and Voyager Digital, as well as the terraUSD stablecoin. Lawmakers also suggested support for a separate but controversial anti-money-laundering measure known as transfer-of-funds rules, which require crypto providers to gather details of their users’ identity. The legislation marks “the end of the ‘Wild West’ era for the unregulated world of crypto assets,” according to the Green grouping’s Ernest Urtasun.
In November, Coindesk reported that the EU delayed the vote until February 2023 due to technical issues concerning the document’s lengthy text and translating it into all the EU languages. The vote was then further delayed until April 2023.
While European legislators have reached an agreement on the law’s principles, the 400-page document must now be officially approved by both lawmakers and national governments comprising the EU’s Governing Council. Although the law will be applicable to all member states, its execution and understanding will heavily rely on regulators in individual countries.
The European Union has long lacked regulation in its crypto-asset market. Although several EU member states have developed their own cryptocurrency legislation, unified rules at the EU level have not yet been implemented, causing legislative fragmentation. To address this issue, the European Parliament Committee on Economic and Monetary Affairs (ECON) approved the text for the Regulation of Markets in Crypto-assets (MiCA) on October 10, 2022, aiming to establish a pan-European approach to crypto-assets regulation.
MiCA represents a significant milestone, introducing the first-ever common licensing regime for crypto wallets and exchanges to operate across the EU and imposing a reserve requirement for stablecoin issuers. It is anticipated that this law will set a standard that will influence crypto rulemaking globally. The implementation of the MiCA regulation is considered a critical step toward modernising Europe and building a future-ready economy that benefits the population.
The MiCA regulation rules will come into effect 12 to 18 months after their publication in the bloc’s Official Journal, which is expected to occur in June, potentially making the EU the first major jurisdiction with a comprehensive crypto law.
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