EU lawmakers give final approval to MiCA crypto legislation

EU lawmakers give final approval to MiCA crypto legislation

The European Union Parliament has officially approved the Market in Cryptoassets (MiCA) – a regulatory framework that could set clear standards in the industry.

The approval comes about five months after the infamous FTX collapse and is intended to protect investors from such failures.

“Strict rules are urgently needed”

The EU Parliamentvoted517-38 in favor of the new cryptocurrency licensing policy – ​​MiCA. It also backed a separate law requiring digital asset operators to identify their customers each time they transfer their funds to prevent money laundering.

The so-called “travel rule,” which has been used in traditional finance, will cover cryptocurrency transactions and provide customers with information about the origin of the assets and the beneficiary. It also applies to transfers worth over €1,000 (around $1,100) from crypto wallet addresses to private users. Person-to-person transactions are not covered.

Mairead McGuinness – EU Commissioner for Financial Stability, Financial Services and the Capital Markets Union – praisedthe MiCA legislation as the world’s “first comprehensive crypto rules”. She said such standards are crucial due to the numerous crashes and scandals that have brought the industry to a standstill over the past year:

"We are putting safeguards in place that would prevent companies operating in the EU market from engaging in some of the practices that led to the collapse of certain cryptoasset operators. As we have seen in recent months, strict rules and supervision are urgently needed as we have seen the collapse of projects such as FTX, Terra Luna, Celsius and Voyager."

Stablecoin legislation is expected to come into force from July 2024, while broader rules for crypto providers are expected to come into force from January 2025.

CZ praises the new rules

Numerous industry leaders have noted in recent months that proper oversight of the cryptocurrency sector is a must. In a recent tweet, Changpeng Zhao – CEO of Binance, better known as CZ – highlighted the EU's move, arguing that it offers more protection to consumers and promotes innovation in the asset class.

The European Parliament voted to implement MiCA.

This means one of the world's largest markets is introducing tailored regulations for crypto to protect users and support innovation.

The fine details will play a role, but overall we think this is a pragmatic solution to...

— CZ 🔶 Binance (@cz_binance) April 20, 2023

Brian Armstrong – CEO of Coinbase – recentlyurgedAmerican authorities to apply rules to the industry, otherwise the nation could witness an outflow of business and talent. He went further and suggested that his exchange could move if the situation remained unchanged.

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