The European Union agreed on landmark regulation for cryptocurrencies in what could be the world’s first regulatory framework for crypto.
EU lawmakers, member states, and the European Commission reached a historic deal on crypto rules Thursday that will apply to crypto-assets, crypto-assets issuers and crypto-asset service providers.
The pioneering law, known as Markets in Crypto-Assets, or MiCa, will come into force at the end of next year and will contain rules to tackle fraudulent schemes, market abuse, and manipulation.
“MiCA will better protect Europeans who have invested in these assets, and prevent the misuse of crypto-assets, while being innovation-friendly to maintain the EU’s attractiveness,” said Bruno Le Maire, French Minister for the Economy, Finance and Industrial and Digital Sovereignty.
“This landmark regulation will put an end to the crypto wild west and confirms the EU’s role as a standard-setter for digital topics.”
MiCA will work alongside and does not duplicate provisions of the Anti-Money Laundering (AML) legislation, which also covers crypto. MiCA proposals were first put forward in 2020.
Crypto-asset service providers will need to be authorised in order to operate in the EU. Crypto industry players will also need to give information of their environmental and climate footprint.
“This provisional agreement by EU regulators to safeguard the crypto sector is a welcome step in the right direction,” said Petr Kozyakov, CEO of payments company Mercuryo.
“There is a real desire for a clear set of rules to protect individuals and businesses who have adopted cryptocurrencies already, to weed out bad actors, and to encourage others to adopt crypto as a result.”
The UK and US, among other countries, have yet to impose a proper regulatory regime for crypto.
“There is no doubt that the EU is now at the forefront of crypto regulation on the global stage, and that it is setting a standard,” Sophia Le Vesconte, Senior Associate in Linklaters’ Fintech team said.
“It remains to be seen whether other jurisdictions will follow that standard.”