11 o’clockth On Thursday, June 30, the final day of the President of France on the Council of the European Union, members of the European Commission, the EU Parliament, and member states reached an agreement on groundbreaking legislation governing crypto assets and service providers. With Crypto Assets (MiCA) regulations.
Stefan Berger, a member of parliament responsible for leading MiCA through EU legislative proceedings, tweeted confirmation that policy makers have reached an agreement. This was also confirmed by European Commission member Mairead McGuiness when she left the meeting.
“I think everyone now knows that you can’t have an unregulated sector,” McGuinness told CoinDesk, referring to the turmoil seen in the crypto market over the last few weeks. did.
“I’m glad we’re leading this, and I think we need international cooperation because it’s important not to regulate ourselves,” she added.
The European Commission proposed this law in 2020, especially after Facebook announced Libra and renamed it to Diem, as a response to the potential risks to Stablecoin’s growth and financial stability. Because the new product is unregulated, regulators were afraid that money laundering prevention (AML) rules could be circumvented, so EU parliamentarians have designed a new law that complements the existing one. This is one of the reasons why the document strictly regulates stablecoin called “asset reference tokens” or “e-commerce tokens” while excluding other crypto assets subject to lighter requirements. is.
For crypto exchanges, crypto issuers, and other companies trading crypto assets, the requirements are to register as a legal entity in Europe and, in many cases, submit a white paper before serving in Europe. It is included. For SMEs, there is an exemption for creating and submitting white papers.
For Stablecoin issuers, from crypto asset issuers, such as having more funds, restrictions on providing interest on Stablecoin, and in some cases complying with additional rules regarding reserves, etc. There are also strict requirements. EU parliamentarian Enrnest Ustasun, who was involved in the negotiations, confirmed on Twitter that the transaction value of large stablecoins will be “up to 200 million euros per day”. Another difference is that if Stablecoin is very relevant, it will be supervised by the European Securities and Markets Authority (ESMA) as well as the European Banking Authority.
ESMA has also been identified as the town’s “new crypto security officer,” said Ustasun, who “has the authority to ban or limit the provision of crypto services or the distribution or sale of crypto assets by crypto asset service providers (CASPs). In the case of a threat to investor protection, market integrity, or financial stability. “
Some aspects have been excluded from this law to reach an agreement, but some policy makers such as the European Central Bank’s Christine Lagarde have added more to cover new areas such as crypto lending. It has already suggested that a law is needed.
“No law is enacted, and it is possible that no law will be enacted in the field of cryptocurrencies,” McGuinness said.
Most non-fungible token (NFT) and decentralized finance (ie DeFi) products are out of regulation, which is probably considered a bailout for the crypto community. However, there is a debate about the legal entity that creates the platform for trading these products (such as OpenSea), whether these entities are responsible for complying with MiCA, and whether the product or service needs to be registered. It was done.
Another point that was not consensus and therefore not included in the final agreement is to limit the environmental impact of the proof-of-work consensus mechanism that underpins Bitcoin.
This agreement paves the way for formal approval by the EU Parliament and the Council of the European Union. However, formal parliamentary approval is unlikely to be granted during the final plenary session before next summer vacation.
Read more: EU cryptographic regulations may need to be clarified from day one