The European Parliament approved this Thursday the first set of comprehensive rules at a global level to regulate and bring order to the cryptocurrency market, seeking to offer protection to consumers against abuse and manipulation.
The new regulation, called MiCA (Mercados en Criptoactivos, in English), also aims to ensure the traceability of transfers to better detect suspicious activities, including money laundering.
Until now, virtual asset transfers are outside the scope of European financial services law.
By regulation, crypto asset service providers (called CASPs) must protect customers’ electronic wallets and will be liable if those assets are lost.
In addition, they will have to disclose their energy consumption, as part of the EU’s efforts to reduce the high carbon footprint of cryptocurrency mining.
A second regulation, known as Transfer of Funds, should allow for greater oversight of the movements of crypto assets, including cryptocurrencies, as is the case with traditional finance.
The EU argues that this will make it more difficult for individuals or groups to use cryptocurrency for illegal activities, such as money laundering.
This regulation “will mark the end of the ‘wild west’ era in the unregulated world of crypto assets”said the Spanish ecologist MEP Ernest Urtasun, one of the main promoters of the initiative in the legislative plenary.
“For more than a decade, the lack of regulation has resulted in massive losses for many investors and provided a safe haven for fraudsters and international criminal networks,” added the MEP. The rules will enter into force progressively from July 2024.
The EU is also preparing proposals for a digital euro, which it hopes to present later this year.
Source: Ambito
