European Union (EU) officials have agreed on a landmark law that will make life harder for crypto issuers and service providers under a new single regulatory framework.
Stefan Berger, member of the European Parliament and representative of the MICA regulation – the person appointed to report on proceedings related to the bill – broke the news on Twitter, saying a “balanced” deal had been struck, which would see the EU become the first continent. has made it. Crypto-asset regulation.
Micah Trilog: Durchbruch! Europa est der Erste Continent mit einer crypto-asset regularung. Parlement, Komission and Rat Heben Stich of Augevogene #MiCA Geinigt für mich als Berichtersttter war Wichtig, das es haer kein Verbennung von Technolgen wi #pow gift / 1
— Stephen Berger (@DrStefanBerger) 30 June 2022
According to the European Council, known as the Market in Crypto-Assets (MICA) framework, the provisional agreement covers rules that govern unsupported crypto assets, stablecoins, trading platforms and wallets in which crypto-assets are held, issuers will be involved.
Bruno Le Maire, the French Minister of Economy, Finance and Industrial and Digital Sovereignty, claimed that the landmark regulation would “end the crypto Wild West.”
fond of stable coins
In the wake of the dramatic collapse of TeraUSD, the Mica regulation aims to protect consumers by “requesting” stablecoin issuers to create sufficient liquid reserves.
In a Twitter thread, Ernest Urtsun, a member of the European Parliament, explained that the reserves should be “legally and operationally separate and untouched” and “fully protected in case of bankruptcy”.
This will see a cap on the stablecoins of 200 million euros in transactions per day.
3/13 Large stable coins will be subject to strict operational and prudential regulations if they are widely used as a means of payment, and with restrictions with a limit of €200 million per transaction/day.
— Ernest Urtsun (@ernesturtasun) 30 June 2022
Crypto Twitter users have already preceded regulation with 24-hour daily volumes of Tether (USDT) at $50.40 billion (48.13 billion euros) and USD Coin (USDC) at $5.66 billion (5.40 billion euros) at the time of writing. Only branded.
It would also be difficult to apply these rules to decentralized stablecoins like DAI.
The agreement came on the same day that Circle launched its Euro-backed stablecoin – Euro Coin.
as @circlepay brings #eurok online, a Euro-backed digital currency, we aim to make it a reliable, well regulated and MICA-compliant innovation. https://t.co/mroCxMCxfs
— Dante Disparte (@ddisparte) 30 June 2022
consumer Protection
Crypto-asset service providers (CASPs) must comply with strict requirements aimed at protecting consumers, and may also be held liable if they lose investors’ crypto-assets.
Urtasun explained that trading platforms would be required to provide a whitepaper for any tokens that do not have a clear issuer, such as bitcoin, and that they would be liable for any misleading information.
Consumers will also be warned about the risk of loss associated with crypto assets and the rules of fair marketing communication.
Market manipulation and insider trading are also of focus, according to a statement from the European Council:
“MiCA will also cover market abuse of any kind relating to any type of transaction or service, in particular market manipulation and insider trading.”
New Sheriff: Esma
The provisional agreement would require authorization for crypto-asset service providers (CASPs) to operate in the European Union, with the largest CASPS being overseen by the European Securities and Markets Authority (ESMA).
ESMA is an independent securities market regulator in the European Union, established in 2011.
The new law does not include restrictions on proof-of-work technologies or include non-fungible tokens (NFTs) within its scope.
However, with regard to NFTs, the European Commission said it would look into this over the next 18 months and, if necessary, make “proportionate and horizontal legislative proposals” to address emerging market risks.
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“Europe’s upcoming crypto-asset policy framework will be the cryptocurrency that GDPR was for privacy,” Circle’s Disparte said.
The provisional agreement is still subject to approval by the Council and the European Parliament before its formal adoption.
