The Council of the European Union (EU) has announced the bloc has reached a “provisional agreement” on a new landmark regulatory framework for cryptocurrencies.
EU reaches agreement on crypto regulation framework
The ‘markets in crypto-assets’ (MiCA) proposal will cover “issuers of unbacked crypto-assets, and so-called ‘stablecoins’, as well as the trading venues and the wallets where crypto-assets are held”.
The council says the new regulation will help protect investors and preserve financial stability while also allowing for continued innovation within the crypto sector.
It is also intended to provide more clarity to EU member states which have so far had no specific EU-wide regulatory framework to follow, forcing many to adopt their own national legislation and leading to differing rules across countries.
“Recent developments on this quickly evolving sector have confirmed the urgent need for an EU-wide regulation,” says Bruno Le Maire, French minister for the economy, finance and industrial and digital sovereignty.
“MiCA will better protect Europeans who have invested in these assets, and prevent the misuse of crypto-assets, while being innovation-friendly to maintain the EU’s attractiveness.
“This landmark regulation will put an end to the crypto wild west and confirms the EU’s role as a standard-setter for digital topics.”
The new rules include requirements for companies to protect consumers’ wallets and assume liability if they lose investors’ crypto-assets.
MiCA will also cover any type of market abuse including market manipulation and insider dealing, as well as require all crypto firms to declare information on their environmental and climate footprint to help tackle any adverse environmental and climate-related impact of crypto.
Non-fungible tokens (NFTs) have been left out of the proposal “except if they fall under existing crypto-asset categories”.
The council says NFTs will be assessed individually within the next 18 months to see if new and specific legislative proposals are required.
It concludes the provisional agreement is “subject to approval by the council and the European parliament before going through the formal adoption procedure”.
