The EU was the first major economic region to agree to regulate cryptocurrencies. Recently, the markets for cyber currencies such as Bitcoin and TerraUSD have experienced severe disruptions and huge price losses. This had increased the pressure on governments and parliamentarians to tighten the line on the hitherto largely unregulated market.
According to MEPs, representatives of the EU Parliament and EU countries have now agreed on a set of rules called “Markets in Crypto Assets” (MiCA). It is likely to come into effect at the end of 2023.
“Wild West of Cryptocurrencies”
“Today we are bringing order to the wild west of cryptocurrencies and setting clear rules for a harmonized market,” said Stefan Berger (EPP), who took part in the negotiations before the EU parliament. The recent price drop of digital currencies shows how risky and speculative they are and that trading is essential.
Berger wrote on Twitter: “Breakthrough! Europe is the first continent to regulate crypto assets.” According to MEP Ernest Urtasun (Greens), MiCA will be the world’s first comprehensive set of cryptocurrency regulations and will include strong safeguards against market abuse and manipulation, he said.
Crypto providers will need an EU passport in the future
With the new set of rules, cryptocurrencies issuers and providers of related services will be given a sort of passport to serve customers across the EU. This should also be linked to capital and consumer protection regulatory compliance. According to Urtasun, EU countries should be the main regulators for crypto companies. But the European financial market regulator ESMA will also have powers if investor protection or financial stability is threatened, he added. According to Berger, it has also been agreed that providers of cryptocurrencies in the future must disclose their energy consumption and the effects of cybercurrencies on the environment.
The crypto market is hardly regulated until now
Cryptocurrencies are currently hardly subject to regulation. In the US and Great Britain in particular, despite a relatively large spread, there are no strict rules. The collapse of digital currencies like TerraUSD recently brought the market back into the headlines. On Friday, Bitcoin was trading at around $19,585. Compared to the annual high of $48,234 in March, the price has more than halved. Last November, one bitcoin was worth more than $60,000.
The Basel Committee for Banking Regulation is currently working on regulations for financial institutions. On Thursday, he published a new consultation document. Among other things, it sets a limit on banks’ exposure to particularly risky cryptocurrencies. The Basel Committee on Banking Supervision, based at the Bank for International Settlements (BIS), sets the global standards for banking supervision.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
