The European Union has finalized the cryptocurrency regulation (MiCA). MiCA’s European Parliament rapporteur, Stefan Berger, tweeted the news on 30 June. The bill consisted of a tripartite discussion group that brought together the European Parliament, the Council and the Commission to reach a final consensus. Here are the details…
EU consensus on cryptocurrencies
The final version has not yet been released to the public. Berger stated in his tweet that the latest version does not prohibit Proof-of-Work mining. MiCA is its first regulation in the EU. It will take years for it to become available among regulatory agencies. Studies for MiCA regulation had been going on for about two years. The arrangement was first presented in 2020. The regulation requires registration of projects that will issue cryptocurrencies. In addition, these projects require offices in the European Union. Apart from that, it also sets out various criteria for stablecoins, which have been in the focus of regulators for a while.
In other words, it is thought that the enactment of the regulation will affect the teams behind stablecoins. So what are stablecoins? Stablecoins are cryptocurrencies based on a specific asset. The underlying assets are usually US dollars and gold. Among the largest stablecoins are:
- Tether (USDT)
- USD Coin (USDC)
- Binance USD (BUSD)
- Dai (DAI)
- FRAX
- TUSD
- USDN
- USDD
- XAUT
- FEI
- GUSD
- SUSD
An agreement was also made on the follow-up of crypto transactions.
Meanwhile, the Transfer of Funds Regulation (TOFR) was the subject of a preliminary agreement between the European Parliament, the Council and the Commission on 29 June. It comes into play for cryptocurrency regulation, including TOFR. With regulation, criminals will now find it more difficult to use cryptocurrency for illegal activities. Negotiators from the Council presidency and the European Parliament, as well as financial transfers, including transfers of crypto assets; reached a tentative agreement on a proposal to update the regulations governing the information that must be provided.
The agreement expands the use of traditional finance’s “rule of travel” to cover transfers of crypto assets. If an investigation into money laundering and terrorist financing is undertaken, crypto-asset service providers (CASPs) will be required to provide this information to the appropriate authorities. Parliamentary negotiators ensured there were no minimums or exemptions for low-value transfers as previously planned. Because in such a case, crypto-asset transactions avoid existing thresholds that would enable traceability requirements.
With the new agreement, the EU will be able to address the dangers of money laundering and terrorist financing associated with these new technologies, while maintaining competition, protecting customers and protecting the financial integrity of the internal market. “Crypto-assets have been under the radar of law enforcement for too long,” Assita Kanko, one of the leading EU lawmakers negotiating the rules, said in a statement.
