Cryptocurrency companies will now need to obtain a license and put in place customer protection measures to issue and sell digital tokens in the European Union

Cryptocurrency firms will need to obtain a license and put in place customer protection measures to issue and sell digital tokens in the European Union, under groundbreaking new rules passed by the union to rein in a volatile market.

Globally, crypto assets are largely unregulated, with only national operators in the European Union requiring anti-money laundering checks.

Representatives of the European Parliament and the member states of the European Union have reached an agreement on the Crypto Asset Markets Act (MiCA).

Today we are ranking crypto assets and setting clear rules for a coordinated marketsaid Stefan Berger, the center-right German MP who led the negotiations.

The recent decline in the value of cryptocurrencies shows us how risky and speculative they are, and that it is necessary to actBerger said.

Cryptocurrency markets have plummeted this year as investors worried about rising interest rates, which led to the collapse of the stablecoin terraUSD and the freeze on withdrawals and transfers through Celsius Network and major Voyager Digital.

Bitcoin, the largest token, has fallen nearly 70% since its all-time high of $69,000 in November, taking the entire market down with it.

Consumer Protection

EU countries emphasized that this landmark regulation underscores the EU’s role as a standard-setting body for digital issues.

Crypto asset service providers will have to adhere to strict requirements to protect consumers’ wallets and become liable in the event of loss of crypto assets to investors.‘, they added.

The new law will need to be formally approved by the European Parliament and EU member states to become law, followed by a period of implementation.

It gives crypto-asset issuers and related service providers a “passport” to serve their clients across the European Union from a single base.

Holders of stablecoins – a type of cryptocurrency designed to hold a fixed value – a claim will be submitted at any time free of charge by the issuer, with all stablecoins overseen by the block’s banking supervisor.

Robert Kubic, general secretary of Blockchain Lobbying Group for Europe, which includes major exchanges Binance and, said the rules were a “mixed bag,” adding that the group was concerned “that stablecoins have no way of making a profit.”

However, Coinbase Global Inc, a major global cryptocurrency exchange, said in a blog post on Friday that the comprehensive new framework is “exciting,” as it provides regulatory certainty to the market and raises industry standards.

A single, coordinated set of rules for the entire EU will allow us to invest and accelerate and intensify growth efforts across the bloc.. “

AFME, a body that specializes in the financial markets industry, said the rules would limit fragmentation and support the development of a strong, well-functioning market.

However, more clarity is needed to ensure that custodians of crypto assets are only responsible for negligence or misconduct, and not for events beyond their control, such as government hacking. -nation , according to AFME.

Compromise NFT

Many countries have long opposed the inclusion of non-fungible tokens (NFTs), which are digital assets that represent objects ranging from art to video clips.

But under pressure from EU lawmakers, the settlement reached on Thursday provides for the exclusion of NFTs”Unless it falls within the current crypto asset classes“.

Brussels will within 18 months assess whether independent rules are necessary for NFTs.

National regulators will be responsible for granting licenses to crypto companies, but they will have to keep the ESMA, the European Union’s securities watchdog, informed of the big operators.

ESMA will develop standards for cryptocurrency companies to disclose information about their environmental and climate footprint.

The United States and Britain, two major cryptocurrency centers, have not agreed to similar rules. read more

Circle, the company behind the USD Coin stablecoin, described the rules as an “important step.”

Although no complete set of rules is perfect […]However, it does provide practical solutions to problems that other jurisdictions are just beginning to address.I wrote in a blog.

Source: European Union

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See also:

EU lawmakers are preparing to tighten controls over cryptocurrency transfers, Coinbase says the rules will introduce a system of oversight that would stifle innovation

MiCA: Europe Offers Crypto Asset Regulation, Rejects Possible Bitcoin Ban, Revokes Amendment Targeting PoW-Based Cryptocurrencies

The European cryptocurrency industry is stepping up its efforts to influence EU policy, so that regulations do not override those already in place

The European Union plans to make bitcoin transfers more traceable, requiring the collection of recipient and sender information

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