The Council of the European Union has adopted the Markets in Crypto-Assets (MiCA) regulation passed by the European Parliament late last month. The Council has set “an EU level legal framework for this sector for the first time,” the legislative body said in a statement.
The Council has just adopted the first-ever EU rules on markets in crypto-assets and services.
— EU Council (@EUCouncil) May 16, 2023
The new regulation aims to improve transparency, preserve financial stability and increase consumer protection while fostering innovation. #DigitalFinanceEU#MiCA
EU Council Stamps MiCA
Finance Magnates reported that the Parliament, one of the two legislative bodies of the European Union alongside the Council, overwhelmingly supported the passage of the law. The lawmakers on April 20th voted 517-38, in favour of and against the rules (with 18 abstentions), thereby making Europe the first major jurisdiction to introduce a comprehensive law to regulate the crypto industry.
Additionally, the legislators voted massively in favour of a separate law known as the Transfer of Funds Regulation, which is a rule that requires digital asset operators to identify their customers in order to prevent money laundering.
“I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector,” said Elisabeth Svantesson, the Minister for Finance of Sweden. “Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” she further explained.
MiCA Eyes 2024 Take Off
MiCA as the world’s first comprehensive crypto law seeks to protect European consumers, enshrine environmental sustainability and prevent money laundering in the crypto industry. This requires digital asset exchanges and crypto wallet providers to obtain a license to operate within any country in the region. In addition, the regulation demands that stablecoin issuers hold sufficient reserves.
#MiCA requires #ESMA to draft a substantial package of implementing measures that must be developed ahead of its application.
— ESMA - EU Securities Markets Regulator 🇪🇺 (@ESMAComms) May 16, 2023
🤝 ESMA is preparing these measures together with NCAs, #ESAs and @ecb. We will announce in due time our approach to consult external stakeholders. pic.twitter.com/ZTVnRkmFCu
The regulation was first presented before the legislative bodies in September 2020 by the European Commission. The law is a part of the larger EU digital finance package, which is a set of legislative proposals and initiatives adopted by the Commission in 2020. The initiatives seek to support innovation and the use of new financial technologies while also ensuring customer and investor protection.
After adopting its mandate on MiCA in November 2020, the Council reached provisional agreements with the Parliament on rules for the law in June last year. In recent months, the EU twice postponed the vote on the much-awaited crypto rules due to technical delays in translating the regulation into the 24 languages of the political bloc.
“Today’s formal adoption of the regulation is the final step in the legislative process,” the Council said in the statement, noting that: “MiCA will protect investors by increasing transparency and putting in place a comprehensive framework for issuers and service providers including compliance with the anti-money laundering rules.”
MiCA is expected to go live sometime in 2024.
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