EU adopts rules to regulate cryptocurrencies for the first time

“This historic arrangement, crypto wild west and affirms the EU’s role as the creator of standards for digital issues.” Bruno LeMaireThe country holds the rotating EU presidency until this Thursday.

this Regulation of the Cryptoactive Market (MiCA abbreviation) aims to bring order to the market for assets that are increasingly used as payment or investment vehicles but not subject to any rules or guarantees to which traditional financial services are subject.

“The EU is the first country to introduce comprehensive rules on this issue. cryptography“I hope others will follow suit,” he said. Mairead McGuinness The person who submitted this initiative on September 24, 2020.

Therefore, the new regulations aim to address emerging challenges in terms of consumer protection, privacy, money laundering, financing of illegal activities and even risks to financial stability in the case of stable currencies. traditional asset such as currency or raw materials.

Congratulating the European Parliament negotiator, MiCA said “MiCA is a European success” and “will become a global standard”, Stefan Berger.

The EU thus puts crypto assets, crypto asset issuers and crypto-asset service providers under a regulatory framework.

The regulation stipulates that cryptocurrency service providers must be owned in order to operate in the EU. physical presence on the continent and obtaining prior authorization from national authorities.

At the same time, requirements are set for the information they must provide. investors about how they will use their funds, their liabilities or the risks of the investment.

Key provisions agreed upon by the negotiators issuing and exchanging crypto assets It covers transaction transparency (including asset reference tokens and electronic money tokens), disclosure, authorization and auditing.

In this way, consumers will be better informed. risks, costs and expenses.

In addition, the new legal framework will support the integrity and integrity of the market. financial stability by regulating the public offering of crypto assets.

The agreed text, measures against market manipulation and money laundering, financing of terrorism and other criminal activities.

Therefore, it will cover crypto assets that are not regulated by MiCA. legislation from existing financial services.

To counter money laundering risks, European Securities and Markets Authority (ESMA) should establish a public registry for non-compliant crypto-asset service providers providing unauthorized services in the European Union.

Thus, despite pressure from some countries to leave oversight in the hands of national authorities, the option of European supervision was imposed; providers cryptocurrencies to their territory.

In contrast, just as non-tradable tokens (NFT) is unique (e.g. movie tickets or video game items) and, unlike cryptocurrencies, is not exchanged or exchanged for equivalent and falls outside the scope of MiCA. However, depending on their evolution, the rules provide for reclassification as financial instruments or crypto assets subject to MiCA.

In order to reduce the high carbon footprint of cryptocurrencies, the main players will have to disclose their energy consumption, whose technical standards should be prepared by the European Securities and Markets Authority (ESMA) to provide a standard to the market. clear guide.

Crypto asset service providers publicly A prominent place on your website, information on the environmental and climate impact and send this information to the competent national authority who will notify ESMA.

Cryptocurrencies have a huge environmental impact as the mechanisms they use to verify transactions require and generate a lot of energy. high polluting emissions and electronic waste, In particular, the process known as “proof of work” used by cryptocurrencies like Bitcoin can have an energy consumption equivalent to that of a small country.

There must be an agreement officially approved It will come into force by Member States and the European Parliament, after which there will be a transitional period until the rules begin to apply.