In a historic move, the European Parliament has approved new regulations governing the use of cryptocurrencies within the EU. Known as MiCA, the regulations are the first comprehensive set of laws designed to regulate the use and trading of digital currencies within a jurisdiction.
EU lawmakers approved the MiCA by a vote of 517 to 38 with 18 abstentions, ushering in a new era of regulation in the digital currency space.
Additionally, the European Parliament voted 529 to 29 in favor, with 14 abstentions, to pass a separate law, the Money Transfer Regulation, requiring cryptocurrency operators to identify their customers to prevent money laundering.
In debates ahead of the vote, lawmakers overwhelmingly backed plans to require cryptocurrency wallet providers and exchanges to seek licenses to operate across the EU and require stablecoin issuers to maintain adequate reserves.
The legislation is expected to come into force in July after it has been formally ratified by all 27 EU member states, EU Financial Services Commissioner Merede McGuinness said. Specific requirements will be implemented gradually, such as stablecoin rules that will come into force in July 2024.
The approval of the MiCA regulations marks a major milestone for the cryptocurrency industry, which has been grappling with a lack of consistent regulation across jurisdictions. The new law will provide clarity and transparency to investors, businesses and regulators alike, and may pave the way for further innovation in the digital currency space.
However, some experts have expressed concern that the regulations could stifle innovation and create barriers to entry for smaller players in the industry. Others argue that the regulations do not do enough to address issues such as consumer protection and market manipulation.
Despite these concerns, the approval of the MiCA regulations represents an important step forward for the cryptocurrency industry and could serve as a model for other jurisdictions looking to regulate digital currencies in a comprehensive and effective manner.
