How this MP saved Bitcoin in the midst of new regulatory reforms in Europe

Last week, the European Commission, EU legislators and member states (known as a trilogy of European politics) agreed on historic reforms to regulate cryptocurrency. I contacted the Member of Parliament (MEP) who was responsible for drafting the legislation on the market for cryptocurrencies (MiCA). MEP Stefan Berger not only led the drafting of the legislation in the committee, but was also responsible for incorporating compromise changes and resolutions.

“It was important that Parliament, the Commission and the Council eventually took together the path of innovation and technology openness, instead of the path of prohibition,” Berger said. In March 2022, Berger had considered an attempt to thwart the mandate against a trilogue in which someone tried to include a divisive provision that could have effectively banned bitcoin (BTC)BTC
) over energy problems.

In Berger’s assessment, the agreed regulations in MiCA will be a ‘global role model’ that can influence how other countries proceed with regulations on cryptocurrencies. “MiCA is a European success story. Europe is the first continent to launch a regulation of cryptocurrencies and will be a global role model,” Berger told me when he declared victory. To celebrate, Berger shared with me that, “Especially as mayor, this is a good feeling. We set clear rules for a harmonized market that will provide legal certainty for issuers of cryptocurrencies, guarantee a level playing field for service providers and ensure high standards for consumers and investors. ”

Berger celebrated the success on Twitter, including his happiness at avoiding a direct ban on evidence-at-work, when he stated: “MiCA Trilogue ‘Breakthrough!’ Europe is the first continent to regulate cryptocurrencies. “Parliament, the Commission and the Council have agreed on a balanced #MiCA. For me as a reporter, it was important that there is no ban on technologies such as #PoW …”

While any immediate ban on bitcoin and proof-of-work in Europe has been avoided, a press release explaining the final version of MiCA contains some provisions affecting proof-of-work. “Players in the cryptocurrency market will be required to declare information on their environmental and climate footprints … Within two years, the European Commission will have to report on the environmental impact of cryptocurrencies and the introduction of mandatory minimum sustainability standards for consensus mechanisms, including evidence-based work, it says in the release.

The press release also highlights new accountability standards for providers of crypto asset services (CASP). “With the new rules, [CASPs] will have to respect strict requirements to protect consumers ‘wallets and become responsible in case they lose investors’ cryptocurrencies, the publication states.

Other key provisions of the MiCA included how the European Banking Authority (EBA) will be tasked with maintaining a public register of incompatible CASPs, and how all CASPs will need an authorization to operate within the EU.

With regard to stablecoins, the press release notes that “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 a sufficient minimum of 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.

“Non-fungible tokens (NFTs), ie digital assets representing real objects such as art, music and videos, will be excluded from the scope unless they fall into existing categories of cryptocurrencies,” the release states. However, MiCA requires that within 18 months, “the European Commission will be tasked with preparing a comprehensive assessment and, if deemed necessary, a specific, proportionate and horizontal bill to establish a regime for NFTs and address the new risks of such new markets. ”

According to Berger, cryptocurrencies had both been outside the scope of European legislation with divergent laws between EU members. “So far, cryptocurrencies, such as cryptocurrencies, have been outside the scope of European law, and there are too many often divergent laws in the member states,” Berger said.

Ultimately, Berger was consistent and influential in his role as chief negotiator for the MiCA package in his desire to avoid evidence-at-work when he was challenged in March 2022. His March 25 tweet illustrates his enthusiasm for the good news about to maintain his mandate to enter into negotiations with the trilogy, at a time when even Berger had expressed feelings about not being sure how this would turn out due to “politics”. Berger stated in the tweet, “Good news! My mandate is NOT challenged. I will now enter the trilogue negotiations with the position that there will be no #PoW ban. The European Parliament gives me tailwinds and shows innovative strength.”

For the United States, issues related to conflicts in state-by-state money transfer laws may face similar overhauls as both the White House and Congress will be strongly focused on potentially comprehensive federal legislation that may have exclusive jurisdiction over state laws. In addition, the UK may feel similar pressure to react to how Europe has been a first-mover with cryptocurrency regulation. The hypothesis of whether harmonization of consistent regulations across a continent can stabilize the currently tumultuous marketplace for cryptocurrencies can now be tested, and both the US and the UK will certainly follow to see how industry and the market respond to the new MiCA laws in Europe .