The European Union (EU) will take major steps in regulating the crypto industry when it finalizes two major crypto-focused regulations by the end of the month.
crypto enterprise consultant patrick hansen Told The rules will have “huge implications for the crypto market in the EU and beyond”. The rules in question are the Market in Crypto-Assets (MiCA) and the Transfer of Funds Regulation (TFR).
MICA is a comprehensive bill designed to regulate most crypto industry activities between EU states. The final meeting between the three leading EU institutions on the bill will take place on 30 June.
At this meeting the EU Parliament, the Council and the Commission will decide on some of the topics that remain open.
EU discussion will extend to NFTs
According to Hansen, the discussion will include whether non-fungible tokens should be within the scope of Mica. Initially, the Commission wanted this to happen, while the Council and Parliament were against it, it appears that the three bodies have now reached an agreement.
A possible compromise is that NFT issuers will be exempt. But companies providing services for third party NFTs will be subject to regulation. This means they will require a Crypto Asset Services Provider (CASP) license to operate.
and also stable coins
In addition, there will also be talk about stablecoins which have become a burning issue since the crash of Terra. Although the key aspects have been finalised, there are still some open aspects.
These include technical limitations for the major stablecoins and who will be responsible for monitoring the stablecoins. The choice is between oversight by national bodies or through a similar continental body.
Meanwhile, decentralized finance (DeFi) will not come under the purview of MICA. The commission plans to publish a report in 2023 and create a pilot project for DeFi supervision.
The meeting will also not discuss the ban on bitcoin mining, but strict disclosure requirements on the environmental impact for crypto asset service providers.
As for the TFR, there are still many open topics and the conversation is expected to be controversial. As of now, all crypto transactions other than peer-to-peer transfers will fall under TFR.
But there are still issues such as verification of unhosted wallets, the need to report transfers above €1,000 to CASPs, AML blacklists, and more. It is unknown whether deliberations on the TFR will end in June.