European Union Passes Comprehensive Crypto Law
Markets in Crypto-Assets (MiCA) Law and Transfer of Funds Regulation Passed by European Parliament
Lawmakers in the European Union have made history by passing a comprehensive crypto law, the Markets in Crypto-Assets (MiCA) regulation. According to the MiCA law, crypto wallet providers and exchanges are required to obtain a license to operate within the EU. The vote, passed on Thursday with a majority of 517-38 and 18 abstentions, makes the EU the first major jurisdiction in the world to introduce such a law.
MiCA Law and Transfer of Funds Regulation
The Transfer of Funds legislation was approved by the European Parliament by a vote of 529 to 29 with 14 abstentions. This rule requires cryptocurrency operators to identify their consumers in order to stop money laundering. The regulation was passed in conjunction with the MiCA law.
The primary objective of the MiCA law and Transfer of Funds regulation is to protect consumers, preserve financial stability and uphold market integrity. Under the MiCA law, all types of crypto-assets, including utility tokens, asset-backed tokens, and stablecoins, will be subject to regulation. Additionally, issuers of stablecoins tied to other assets will be required to maintain sufficient reserves.
Positive Reactions
Mairead McGuinness of the European Commission hailed the vote as a groundbreaking event for crypto regulations and confirmed that the regulations will come into effect from the following year. In a statement issued by the European Parliament, Stefan Berger, who played a leading role in the law negotiations, remarked that the regulations have placed the EU “at the forefront of the token economy”. He also stated that the rules can help restore trust in the sector, which had been affected by the FTX collapse.
In a tweet, the European Securities and Markets Authority (ESMA) expressed their approval of the vote and announced that they will soon reveal their timetable for drafting secondary legislation under MiCA. However, the agency also cautioned consumers that investing in crypto assets is a risky venture at this stage, with limited safeguards.
Implementation of the Law
The Markets in Crypto Assets regulation was first proposed by the European Commission in 2020 and needed to be approved by the parliament and the EU’s Council, which represents the bloc’s member states, to pass into law. The major provisions of the law are expected to take effect just a little over 12 months after being published in the EU’s official journal, with a probable date in June.
The Markets in Crypto Assets regulation was first proposed by the European Commission in 2020 and needed to be approved by the parliament and the EU’s Council, which represents the bloc’s member states, to pass into law. The major provisions of the law are expected to take effect just a little over 12 months after being published in the EU’s official journal, with a probable date in June.
Conclusion
A big step has been taken towards regulating the cryptocurrency business with the adoption of the Markets in Crypto-Assets (MiCA) bill and Transfer of Funds regulation by the European Parliament. The EU is now the first significant region to pass an extensive crypto law. The law’s objectives are to defend financial stability, ensure consumer protection and uphold market integrity. When it is put into practise, a regulatory framework for the cryptocurrency sector will be created, giving investors and firms in the sector clarity.
Disclaimer
The information presented in this Blogpost is solely for educational and informative purposes and should not be misconstrued as investment, financial or legal advice. Cryptocurrencies are a highly unstable and speculative market and their worth is susceptible to substantial fluctuations. Therefore, it is advisable to conduct personal research and seek counsel from qualified experts before making any financial decisions.
