The European Union agrees to a tighter regulatory framework for the crypto space
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Answer The European Union agrees to a tighter regulatory framework for the crypto space
On June 30, European Union policymakers reached an agreement on what would become the first major regulatory framework for the cryptocurrency industry.
Markets in Crypto Assets (MiCA) legislation will make things more difficult for crypto exchanges and stablecoin issuers operating in Europe.
Under the new regulations, stablecoin issuers such as Tether and Circle will be required to hold a reserve to meet any mass redemption requests.
They may also face limits of €200 million in daily transactions, according to CNBC.
The organization of the crypto arena:
The European Securities and Markets Authority (ESMA) has been given more powers to restrict or ban crypto companies that are not seen as doing enough to protect investors.Read:A Crypto User Loses Over $100K in Bitcoin…This Is Why!
European Parliament policy maker Stefan Berger described the industry as the Wild West and vowed to clean it up:
Today, we have put the system in place in the wild west of crypto assets and established clear rules for a coordinated market that provides legal certainty to issuers of crypto assets, guarantees equal rights to service providers and ensures high standards for consumers and investors.
There will also be environmental regulations, as crypto companies are required to disclose their energy consumption.
In addition, they will have to explain how digital tokens affect the environment, which is unlikely to bode well for cryptocurrencies that rely on a Proof of Work (mining) mechanism.
Regulators were also concerned about anonymity and privacy-focused crypto assets, and agreed to reduce the anonymity of such transactions.
It is worth noting that money laundering remains a major concern for regulators, especially in light of the sanctions imposed on Russia.
There will be a €1,000 limit for transactions between trading platforms and individual decentralized wallets and anything above that must be reported to the authorities.
Stable Cryptocurrency Concern:
European Union lawmakers are particularly concerned about stablecoins, especially since the collapse of the Terra ecosystem.Read:Amid the growing “Metaverse” frenzy: ProShares files the “Metaverse ETF” with the SEC…Details here
Robert Kubis, general secretary of the Blockchain Group for Europe, told:
The European Union is not happy about stablecoins in general.
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