The European Union has approved new cryptocurrency licensing rules, making it the first major jurisdiction in the world to introduce a comprehensive crypto law. The new law requires crypto wallet providers and exchanges to seek a license to operate across the bloc, and requires stablecoin issuers to maintain sufficient reserves. Lawmakers in the European Parliament also passed the Transfer of Funds regulation, which mandates that crypto operators identify their customers to halt money laundering. The law, called MiCA, aims to protect consumers, safeguard financial stability, and market integrity. Stefan Berger, the lawmaker who led negotiations on the law, said that the European crypto-asset industry now has regulatory clarity that does not exist in countries like the U.S. The rules will start applying from next year, with the main provisions likely to take effect in June 2023.
The Markets in Crypto Assets regulation was first proposed by the European Commission in 2020 and had to be approved by both the parliament and the EU’s Council, which represents the bloc’s member states. With a vote of 517-38 in favor of the new crypto law, MiCA, the EU has positioned itself as a global leader in consumer protection and cryptocurrency regulation. The decision was applauded by the European Commission's Mairead McGuinness who described it as a "world first" for crypto rules. The EU's decision to create a comprehensive crypto law is expected to have a significant impact on the industry, as it will bring regulatory clarity and attract institutional investors. The new law will also ensure that crypto transactions are safe, secure, and transparent, and will bolster the integrity of the global financial system.
