Trialogue between European agencies concludes in agreement on regulating digital assets
Stefan Berger, a German centre-right lawmaker who led negotiations and reporter for Markets in Crypto-Assets (MiCA), wrote that Europe will become the first continent to regulate crypto assets.
“Today we put order in the Wild West of crypto assets and set clear rules for a harmonised market,” said Berger.
The legislation introduces rules covering introduction of unsecured crypto assets, stable-coins, trading and custody platforms.
According to Ernest Urtasun, member of European Parliament, the agreement will provide security for investors and support sustainability, while reducing fragmentation and increasing legal clarity.
MiCA, says Urtasun, is to provide safeguards against cases like the crypto-crash and the collapse of the Terra stable-coin. The issuers will be required to follow rigorous operational and prudential rules with stable-coin restrictions if they’re mainly used as means of payment, limiting transactions to 200 million euros per day.
The European Securities and Markets Authority (ESMA) will have more powers to police the crypto market. It will have intervention capacity to prohibit or restrict the provision of crypto-asset services by CASPs or distribution or sale of crypto-assets, in case of a threat to investor protection, market integrity or financial stability.
Trading platforms will be required to provide white-paper and will be subject to sanctions for misleading information.
MiCA will cover every aspect of market abuse, connected with all transactions and service, specifically market manipulation and insider trading.
Crypto-assets service providers will need a permit to operate in the EU. This will become the domain of the ESMA.
MiCA does not implement ban on Proof-of-Work. The NFTs did not get on the legislative radar for now either. In the next 18 months the European Commission could add provisions to the legislation.
In March the EU Parliament suggested the notion of verification of ‘unhosted’ crypto wallets, but last week’s meeting largely overturned the Parliament proposal to impose laundering checks on all payments to private wallets.