EU Makes Deal on MiCA Legislation to Regulate Crypto Markets – Markets in Crypto Assets (MiCA) law will be implemented throughout the 27-strong bloc, according to the agreement reached by negotiators representing the major institutional bodies of the European Union.
It will enact licensing for cryptocurrency businesses and protections for their clients. The deal comes after there was agreement on cryptocurrency anti-money laundering rules.
The three parties involved in the complex legislative process of the EU, the European Parliament, Commission, and Council, are in charge of the agreement.
MiCA will now require the consent of the Parliament and the governments of each state in order to become law. Stefan Berger, the package’s rapporteur, shared the breakthrough in the trilogue on social media.
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Berger stated in a tweet that “Europe is the first continent with crypto asset legislation” while pointing out that the most recent draft does not include a controversial suggestion to outlaw technologies like energy-intensive proof-of-work (PoW) mining.
According to Reuters, the German member from the center-right who oversaw the negotiations said the following:
“Today, we establish clear guidelines for a regulated market and bring order to the Wild West of cryptocurrency assets. The recent decline in the value of digital currencies serves as a reminder of how highly speculative and risky they are, and how important it is to take action.”
Following the terrausd (UST) stablecoin’s collapse last month and substantial issues at well-known crypto companies like Celsius Network, 3AC, and Voyager Digital, the cryptocurrency markets plummeted this year. The cryptocurrency with the largest market cap, Bitcoin (BTC), has lost 70% of its value since hitting a record high in November. Within the time of writing, it is currently trading at just over $19,000 per coin.
The significant law, according to the European Union, affirms its position as the industry standard-setter for digital matters. According to a statement, MiCA will provide cryptocurrency issuers and suppliers of associated services a “passport” to serve customers throughout the Union while requiring them to adhere to “severe standards to protect consumers’ wallets and become accountable in case they lose investors.”
Additionally, stablecoin owners will be provided with the security of a cost-free claim at any time. This move has some in the industry, including the Blockchain for Europe lobby group, worried that “stablecoins will essentially have no ways to be profitable.”
Non-fungible tokens (NFTs) are not included in the agreement “unless if they fall within existing crypto-asset classifications.” The authorities in Brussels now have 18 months to determine if they require separate legislation.
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The responsibility for issuing licenses to cryptocurrency businesses will fall on national regulators. They will also be required to notify the European Securities and Markets Authority (ESMA) on a regular basis regarding the authorization of big operators.
As part of a compromise agreement, the latter has been tasked with creating standards for crypto companies to disclose information about their environmental and climate footprint. This has allowed the idea to outlaw the provision of services for PoW coins to be scrapped.