[NEWS] European Parliament Passes Cryptocurrency Regulation MiCA

On the 20th, the European Parliament announced that it had passed the MiCA (Cryptocurrency Market Regulation Act), a bill to regulate crypto assets (virtual currencies) in the EU (European Union). This will bring uniform crypto asset regulations into force in Europe.

MiCA was passed with an overwhelming majority, with 517 votes in favor, 38 against, and 18 abstentions.

The bill is comprehensive for crypto asset service providers and crypto asset issuers and traders. In addition to basic user protections, it stipulates requirements for licensing of crypto asset service providers and stablecoin issuers.

The final agreement document is said to include measures to prevent market manipulation, money laundering, terrorist financing, and other criminal activities.

ESMA (European Securities and Markets Authority) claims that a public register of non-compliant crypto asset service providers operating in the EU without a license must be established to counter the risk of money laundering and other crimes. ESMA will prepare guidance on the application of MiCA in the future.

MiCA was proposed in 2020, and at one point became a hot topic because it included a clause banning cryptocurrencies that use PoW (Proof of Work) such as Bitcoin as a consensus algorithm, taking into consideration the environmental impact.

The PoW stock restrictions were rejected in March last year by a majority vote and are not included in the bill passed this time.

The European Parliament also passed a bill to make it mandatory to track the transfer of cryptocurrencies. The bill was passed with 529 votes in favor, 29 votes against, and 14 abstentions.

The bill was created with the international regulation "Travel Rule" set by the Financial Action Task Force (FATF) in mind, and aims to obtain information on the sender and receiver of cryptocurrencies and deter fraudulent transactions.

Stefan Berger, a member of the European Parliament, commented in the announcement, "The EU will be at the forefront of the token economy with 10,000 types of cryptocurrencies. Consumers will be protected from deception and fraud, and the sector damaged by the collapse of FTX will be able to regain trust."

He added, "This regulation will give the EU a competitive advantage. The European cryptocurrency industry now has regulatory clarity that countries like the United States don't have."

These bills need to be formally approved by the European Council to become law.

Once formally approved, the stablecoin regulations will come into effect in July 2024. And the travel rule regulations are expected to come into effect in January 2025.

Source: European Parliament Announcement
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