6 changes for cryptocurrencies


The MiCA law is on the right track. While some countries already have specific rules for cryptocurrencies, this project aims to put in place a regulatory framework for the whole of the European Union.

MiCA encompasses crypto-assets, issuers, as well as service providers, called “Crypto-assets service providers” or “CASPs” within the framework of the regulation. As explained by the Minister of the Economy, Bruno Lemaire, this will put an end to “the law of the jungle” in the sector while being favorable to innovation.

After a provisional agreement between the Presidency of the Council and the European Parliament announced in June, the MiCA law has just taken a new step towards its adoption. This has just been given the green light by the European Parliament’s Economic and Monetary Affairs Committee (ECON).

The provisional agreement obtained a large majority, with 28 for and 1 against. The next step will be the vote on this project by the entire European Parliament.

It is estimated that MiCA could come into force by 2024. And once these new rules apply in the European Union, they will bring quite a bit of change to the crypto and digital asset industry.

Consumer Protection

First of all, with this regulation, the European Union aims to protect people who invest in cryptocurrencies. And recent events prove him right.
The EU will therefore impose new requirements for crypto-asset service providers. The law also engages the liability of these service providers in the event of losses of investors’ cryptos.

And to practice in the European Union, a service provider will have to obtain an authorization. An authorization which can be obtained after a period of three months.

Anti-Money Laundering

With regard to the fight against money laundering, the MiCA law will be supplemented by another draft law. This will apply to crypto the same rules that apply to fiat currencies.

In particular, cryptocurrency transfers will need to be tracked with information about who is sending the funds and who is receiving them. For their part, crypto-asset service providers will have to provide this information to the authorities if an investigation for money laundering or terrorist financing is underway.

On the other hand, the European Banking Authority (EBA) will keep a list of non-compliant providers. And stricter controls will be needed for companies whose parent company is in a country that the EU considers high risk.

The programs will be more supervised

The EU will also better regulate the issuance of crypto-assets. In essence, if an organization wants to issue new crypto, it will have to follow a number of rules and be supervised by the relevant authorities. The publication of a white paper will be mandatory. And the MiCA law will also include rules against misleading advertising on these crypto news.

For the case of stablecoins

The provisional agreement on the MiCA also provides new requirements for stablecoins, these cryptocurrencies whose values ​​are backed by those of currencies such as the euro or the dollar. If the EU does not ban them, it will nevertheless ensure that the issuers of these stablecoins have “sufficiently liquid” reserves.

The MiCA law will also guarantee investors the right to be reimbursed at any time and free of charge. And issuers will have to be present in the European Union.

What about NFTs?

For the moment, NFTs, like digital works of art, fall outside the scope of MiCA. However, the law provides that this may change later.

New rules for mining?

The energy consumption associated with blockchains and cryptocurrencies is one of the main concerns we have with these technologies. And with the MiCA law, the European Union also provides new rules in this area.

Indeed, players in this market will have to declare information on the impact of their activities on the climate. And later, “sustainability” standards will be imposed for consensus mechanisms. These should in particular target the energy consumption of cryptos whose consensus is done via proof of work (such as Bitcoin, but not Ethereum).

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