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EU agrees on landmark MiCA rules putting pressure on UK and US to regulation crypto assets too

The Guardian | Dan Milmo  | Jul 1, 2022

EU MiCA rules 1 - EU agrees on landmark MiCA rules putting pressure on UK and US to regulation crypto assets tooThe EU has moved to rein in the “wild west” of crypto assets by agreeing a groundbreaking set of rules for the sector, adding to pressure on the UK and US to act too.

Representatives from the European parliament and EU states inked an agreement on Thursday that contains measures to guard against market abuse and manipulation, and require that crypto firms provide details of the environmental impact of their assets.

  • “Today, we put order in the wild west of crypto assets and set clear rules for a harmonised market,” said Stefan Berger, the German MEP who led negotiations on behalf of the parliament.  The recent fall in the value of digital currencies shows us how highly risky and speculative they are and that it is fundamental to act.
  • The European parliament’s markets in crypto assets (MiCA) law is expected to come into force at the end of 2023. Globally, crypto assets are largely unregulated, with national operators in the EU required only to show controls for combating money laundering.

See:  A European approach to DeFi regulation

MiCA will be the world’s first comprehensive regime for crypto assets and will contain strong measures to guard against market abuse and manipulation, said Ernest Urtasun, a Green party MEP:

  • The law gives issuers of crypto assets and providers of related services a “passport” to serve clients across the EU from a single base, while meeting capital and consumer protection rules.
  • Non-fungible tokens (NFTs), a $40bn market last year, are not covered by MiCA.
  • The EU negotiations focused on issues such as supervision and energy consumption of crypto assets. “We have agreed that crypto asset providers should in future disclose the energy consumption and environmental impact of assets,” Berger said.

The MiCA law is expected to set a benchmark for other regulatory regimes globally, although one expert said the all-encompassing nature of the EU regime might not be replicated.

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