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The Economic and Financial Affairs Council of the European Union unanimously supported the Markets in Crypto-Assets (MiCA) regulation during a voting session on May 16, 2023.
The Finance Ministers from the 27 member nations endorsed the MiCA legislation, which includes modifications to various rules pertaining to the new crypto framework.
EU Council Endorses MiCA Legislation
The EU Council’s endorsement follows the European Parliament’s approval of the MiCA bill less than a month earlier. On April 20, EU lawmakers voted 517-38 in favor of the new crypto licensing framework.
This new legislation establishes extensive regulatory guidelines for crypto assets and associated services throughout the EU, encompassing a broad spectrum of digital assets, such as utility tokens and stablecoins.
Initially proposed to the European Commission in 2020, the MiCA bill has developed into one of the first all-encompassing regulatory structures for the crypto sector. The legislation aims to regulate cryptocurrency issuers, exchanges, and wallet providers by outlining registration and authorization prerequisites.
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Issuers of stablecoins will also be required to fulfill specific standards, including security and risk management strategies. Concurrently, crypto custody service providers must adopt security and safety protocols to address potential cybersecurity and operational risks. The EU anticipates that the MiCA bill will aid in preventing market manipulation, abusive practices, and insider trading within the crypto domain.
MiCA Set to Launch in 2025
With the EU Parliament and Council having approved the MiCA framework, the subsequent step will be to publish it in the EU journal. The regulations concerning stablecoins are projected to take effect in mid-2024, while the broader regulations for crypto service providers may be implemented starting January 2025.
In conjunction with MiCA, the EU plans to enforce the Travel Rule guidelines beginning January 2025. This rule will pertain to crypto transactions, mandating that customers receive information regarding the source of the assets and the beneficiary. The travel policy, applicable to transfers exceeding €1,000 (approximately $1,100) from crypto wallet addresses to private users, will not be enforced on person-to-person transactions.
Meanwhile, numerous industry leaders have commended the new regulations, asserting that they foster innovation in the crypto sector while safeguarding consumers. Some have also called on U.S. regulators to establish clear guidelines for the crypto industry to avert a migration of businesses and talent.
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