- “Those who are in this space are thinking of being innovative will now do it in a way that sits within our regulation rather than in the Wild West.”
- The law also introduces tough requirements for stablecoin issuers.
- Once today’s political deal is formally endorsed and the text gazetted in the EU Official Journal, crypto companies will still have a transition period during which they can adopt the new rules.
The third-largest economy in the world seeks to protect investors and establish tight guidelines for stablecoin issuers with the Markets in Crypto Assets Regulation as reported by Coin Desk.
Landmark legislation
European Union (EU) policymakers have struck a deal on landmark legislation to regulate crypto assets and service providers throughout the bloc’s 27 member nations.
The policymakers, who represent the world’s third-largest economy, have been haggling for nearly two years over the Markets in Crypto Assets (MiCA) framework.
As it stood on Thursday, the legislative package sets up requirements for crypto issuers to publish a kind of technical manifesto called a “white paper,” to register with the authorities and keep proper bank-style reserves for stablecoins (cryptocurrencies pegged to the value of an asset such as sovereign currencies like the euro).
Turbulence in crypto markets
Stefan Berger, the parliamentarian in charge of seeing MiCA through the EU’s complex legislative process, tweeted confirmation that policymakers had reached an agreement.
“I think everybody’s now aware that you can’t have an unregulated sector,” McGuinness told CoinDesk, referring to turbulence seen in recent weeks in crypto markets.
“We’re glad that we’re leading on this,” she said, adding that “we do think there needs to be international cooperation because it’s important that we don’t regulate on our own.”
McGuinness has previously called for the U.S. to cooperate on crypto regulation, and there are recent signs that the Biden administration is considering its own stablecoin laws.
“Those who are in this space are thinking of being innovative will now do it in a way that sits within our regulation rather than in the Wild West.”
Tough requirements
Lawmaker Ernest Urtasun tweeted that the deal would include a cap on large stablecoins that become widely used as a means of payment, meaning that they can’t exceed 200 million euros of transactions per day.
The law needed approval from EU governments and lawmakers to pass – which it now has.
MiCA has been broadly welcomed by the industry because it can increase credibility, promote adoption by conventional banks and offer crypto companies a single license to operate across the bloc.
The law also introduces tough requirements for stablecoin issuers.
The stablecoin rules were initially proposed as a reaction to libra, the cryptocurrency proposed by the former Facebook, which finance ministers worried would usurp governments’ role in controlling money.
It also follows hot on the heels of controversial anti-money laundering measures that the EU agreed to impose on crypto service providers Wednesday.
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Source: Coin Desk
