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The EU Parliament approved a new crypto licensing regime (MiCA) and a separate set of rules governing the transfer of funds.
Lawmakers in the European Union (EU) recently voted in favour of the region’s landmark Markets in Crypto-Assets regulation (MiCA), making it the first major jurisdiction to introduce a comprehensive crypto regulatory framework. The latest vote clears the way for MiCA to take effect in 2024.
MiCA will be enacted to reduce the risks for consumers purchasing crypto assets. The rules mean crypto asset providers may become liable should they lose investors’ funds.
The EU Parliament said in a statement that MiCA would impose several requirements on crypto platforms, token issuers and traders around the transparency, disclosure, authorization and supervision of crypto transactions.
MiCA also introduces rules regarding stablecoins. For instance, Tether (USDT) and Circle’s USDC will be required to maintain a sufficient reserve should a mass withdrawal occur.
The regulation further grants powers to the European Securities and Markets Authority (ESMA) to ban and restrict crypto platforms they deem not adequately protecting investors or threatening financial stability or market integrity. MiCA finally addresses crypto’s environmental concerns by compelling firms to disclose their energy consumption.
EU Parliament Votes in Favour of ‘Transfer of Funds’ Regulation
In the same session, lawmakers also approved a separate law known as the Transfer of Funds regulation to reduce the anonymity involved in transferring cryptocurrencies such as Bitcoin.
The Transfer of Funds regulation requires crypto operators to screen, record, and communicate information on the sender and recipient to help the fight against money laundering, CNBC reports.
The rule also governs transfers between exchanges and “self-hosted” wallets. Any self-hosted wallet owned by individuals must be reported if the amount exceeds the 1,000-euro threshold.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.