Image Source: Crypto Slate
According to EU parliamentarians, the European Union has approved groundbreaking regulations for the industry as the price collapse of bitcoin increases pressure on policymakers to control the market.
Cryptocurrency assets are generally uncontrolled globally, and national operators in the EU are merely needed to demonstrate safeguards to prevent money laundering.
The markets in crypto assets (MiCA) law, which is anticipated to go into effect at the end of 2023, was hammered out by representatives from the European Parliament and EU states.
Ernest Urtasun, a politician for the Green Party in the parliament, continued, “MiCA will be the first comprehensive regime for crypto-assets in the world and will feature strong measures to prevent against market misuse and manipulation.”
By conforming to capital and consumer protection regulations, the new regulation gives cryptocurrency asset issuers and service providers a “passport” to serve clients across the EU from a single location.
Two significant crypto hubs, the US and UK, have not yet approved comparable regulations.
After the collapse of TerraUSD and luna tokens last month, pressure on cryptocurrency assets increased, and this month, major US cryptocurrency lending company Celsius Network frozen withdrawals and transfers.
Bitcoin fell this month to roughly $17,600, and as investors nursing their losses, it was trading at around $18,900 on Thursday. This is significantly below its late March level of $48,200.
On Thursday, discussions centered on concerns such as crypto asset supervision and energy usage.
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Although the securities watchdog of the EU, ESMA, would have the authority to intervene if investor protection or financial stability is in danger, EU nations will serve as the primary regulators for cryptocurrency businesses, according to MP Urtasun.
In July, regulators will reportedly attend a supervisory board meeting from 19 EU member states to review MiCA and its potential implementation. When the law is put into effect, asset service providers will have to abide by particular rules designed to protect investors and inform clients about the potential risks of investing in a volatile cryptocurrency market. Additionally, an 18-month review period would be given to EU officials to evaluate the proposed regulatory framework and determine if other cryptocurrency-related items, such as nonfungible tokens, are included (NFTs).