EU’s Landmark Markets in Crypto-Assets Regulation Gets European Council's Green Light

The laws are expected to come into force in early 2024 or later.

Written by Shomik Sen Bhattacharjee, Edited by Richa Sharma | Updated: 6 October 2022 17:05 IST

EU’s Landmark Markets in Crypto-Assets Regulation Gets European Council's Green Light

Photo Credit: Unsplash/ Maximalfocus

The bill is expected to be covered by the EU’s official journal before it would go into effect in 2024

Highlights

The EU is getting ready to regulate the digital assets sector
The bill was signed off by members of the EU Council
The European Parliament will also vote on the proposal on October 10

The European Union has reached an agreement on the Markets in Crypto Assets Regulation (MiCA) framework that spells out how the region should approach the crypto sector. Officials from countries in the bloc signed the framework text into law without any further deliberation, the Council of European Union (EU) said in a statement released on October 5. MiCA is a culmination of political outlines set out in June seeking to have a comprehensive crypto legislative text covering the region. The framework is guided by the goal of protecting consumers and fighting crypto-related crimes like money laundering.

MiCA sets out to bring the issuance of cryptocurrencies under the wing of institutional regulation and establishes a first-time regime for crypto-asset service providers across the EU's member states. The regulations also seek to impose restrictions on Dollar-denominated stablecoins like USDT and USDC in a bid to promote more Euro-based stablecoins. Wording related to the stablecoin regulations was amended last month, but the harsh restrictions were later added back after some French officials raised concerns about preserving the euro's sovereignty.

The next step towards formal adoption of the legislation comes on October 10, when the European Parliament's economic affairs committee will also vote on the proposal.

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Then, after translating the text into the EU's more than 20 official languages, the file is projected to be adopted into the EU's Official Journal to formalise its enforcement. MiCA includes a 12-18 month adaptation period to prepare for the new laws set in place.

It is worth noting that the European Council isn't the only regulatory body keeping close tabs on stablecoins and the broader cryptocurrency space this year. The White House also made its biggest move yet in regards to regulating the nascent sector last month, releasing the first framework for regulating crypto assets in the US.

Published after President Biden signed an executive order on "Ensuring Responsible Development of Digital Assets", the paper outlines how the US government is thinking about crypto regulation, calling on agencies like the Treasury and the Securities and Exchange Commission (SEC) to continue monitoring the space over the coming months.

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