This landmark law aims to end crypto as we know it in 2023 as the price of Bitcoin, Ethereum, BNB, XRP, Solana, Cardano and Dogecoin Rebound
The crypto market turned green in the first week of July.
The price of bitcoin rose 7.4% and the price of ethereum rose as much as 15.2% this month. Cardano
Meanwhile, last week, the EU entered into a preliminary agreement on a groundbreaking set of crypto rules. Known as Markets in Crypto-Assets (MiCA), the Landmark Act is set to enter into force in 2023 and become the world’s first regulatory framework for digital assets.
“Today, we are ordering the Wild West of cryptocurrencies and setting clear rules for a harmonized market that will provide legal certainty for issuers of cryptocurrencies, guarantee equal rights for service providers and ensure high standards for consumers and investors,” said Stefan Berger, a member of the European Parliament responsible for MiCA.
European Parliament
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Here is a quick review of key MiCA and other crypto regulations the EU agreed on.
First, the EU watchdogs will closely monitor crypto for signs of market manipulation and insider trading to protect investors from Ponzi schemes and so-called “rug pulls”. Cryptocurrencies will have to comply with strict requirements and will be held responsible for any market abuse.
The EU then seeks to ban all stack coins that are not supported by a liquid reserve in a 1-to-1 ratio and do not have a presence in the EU. Holders of compatible stack coins will also have the right to redeem their tokens for free at any time.
Any so-called “stablecoin” holder will be offered a claim at any time and free of charge by the issuer, and the rules for operating the reserve will also provide an adequate minimum liquidity. Furthermore, all so-called “stablecoins” will be monitored by the European Banking Authority (EBA). ), with the presence of an issuer in the EU as a prerequisite for any issue, it is stated in the press release from MiCA.
On top of that, the European Parliament agreed on a separate set of rules for crypto-traceability that imposes traditional financial-like reporting standards for crypto. The bill aims to ensure that all crypto transactions are traceable “from the first euro sent”.
The agreement extends the so-called “travel rule”, which already exists in traditional finance, to cover transfers in cryptocurrencies. This rule requires that information about the source of the asset and its beneficiary travel with the transaction and be stored on both sides of the transfer. CASPs) will be obliged to provide this information to the competent authorities “, reported the Council of the European Union.
According to this bill, crypto holders will have to report all transactions and transfers between exchanges from “non-hosted wallets” exceeding EUR 1000.
Looking forward
MiCA paves the way for a global cryptoregulatory framework. And the regulations could be a sign of what’s coming in the rest of the world, which is a double-edged sword for crypto investors.
On the one hand, the industry welcomes the agreement because such a regulation could increase crypto-adoption among institutional stakeholders and give crypto suppliers a “passable” license to scale across the block.
On the other hand, if MiCA and EU cryptocurrency traceability rules become the global standard, they will defeat the original promise of crypto as a decentralized and anonymous alternative to fiat currencies.
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