On 20 April 2023, the EU Parliament passed the so-called ‘Regulation on Markets in Crypto Assets’ (MiCA) with a large majority
By Scoop Editorial/scoop.me
The EU Parliament passed a law to regulate cryptocurrencies like Bitcoin more strongly. The new regulation will protect consumers from losses, and it will make money laundering and terrorist financing more difficult. In addition, providers are to be held liable in the event of massive losses. With the new law, Europe wants to end the “wild west of the blockchain world”.
On 20 April, the EU Parliament passed the so-called “Regulation on Markets in Crypto Assets” (MiCA) with a large majority. Until now, it was possible to trade cryptocurrencies largely anonymously. Bitcoin & Co. are therefore popular with money launderers and fraudsters. This is now to come to an end.
Crypto exchanges will be subject to national supervisory authorities
Insider trading and abuse of power are to be made more difficult by the regulation. Service providers and suppliers of crypto-assets must submit to money laundering regulations. In addition, platforms and crypto exchanges will be subject to national supervisory authorities. Those platforms on which cryptocurrencies can be traded must also provide information about the sender and recipient of the transactions.
This is the first law to comprehensively regulate cryptocurrencies such as Bitcoin, Etherum, etc. Evelyn Regner, Vice-President of the EU Parliament, comments on the decision:
“WITH THIS LAW, WE ARE NOT ONLY CREATING A MODEL FOR THE REGULATION OF CRYPTO MARKETS, BUT ABOVE ALL STRENGTHENING THE PROTECTION OF CONSUMERS AND INVESTORS AND INCREASING LEGAL CERTAINTY FOR PROVIDERS.
EU Regulation on Cryptocurrencies makes money laundering and terrorist financing more difficult
At the same time, the regulation ensures that trading with Bitcoin & Co. can be better tracked. Suspicious transactions that are related to money laundering or terrorism, for example, can thus be identified more quickly.
“THIS IS LONG OVERDUE, BECAUSE UNDER THE GUISE OF INNOVATION, CRYPTOCURRENCIES ARE OFTEN A CONVENIENT WAY TO COVER UP CRIMINAL MONEY FLOWS. A WHOLE 22 BILLION EUROS WERE LAUNDERED THROUGH CRYPTO ASSETS IN 2022. THIS MUST NOW BE PUT TO AN END,” REGNER SAID.
The regulation is to come into force in stages from 23 June. From July 2024, crypto-assets tied to currencies – so-called stablecoins – will then have to prove larger financial reserves in order to be approved. The complete regulation will then come into force in January 2025 at the latest. The “Wild West of the blockchain world” will thus come to an end, according to European Parliament member Stefan Berger.
Bitcoin mining consumes as much energy as the whole of Austria every year
However, Regner points out that the EU’s regulation on cryptocurrencies is only a first step: “However, not all the work is done with the regulation adopted today, because crypto markets continue to develop rapidly. Therefore, the EU Commission should continue to closely monitor developments in the crypto asset markets and propose further regulation if needed.”
Especially in the area of sustainability, it is imperative to tighten up: “Bitcoin mining alone consumes as much energy annually as the whole of Austria. Therefore, in the future, we will also need minimum standards for sustainability, which have not made it into the regulation for the time being due to considerable resistance from the centre-right.”
Main/Featured Image by Mohamed Hassan from Pixabay has been used for illustrative purposes only
