On May 16, the finance ministers of all European Union member states unanimously voted in favor of adopting the Markets in Crypto-Assets regulation. The Economic and Financial Affairs Council of the European Union, responsible for this decision, approved the long-awaited Markets in Crypto-Assets regulation.
MiCA crypto regulation approved by European Union finance ministers
After a vote on May 16, the Economic and Financial Affairs Council of the European Union, consisting of finance ministers from all member states, has granted approval to the highly-anticipated Markets in Crypto-Assets (MiCA) regulation.
The MiCA bill received positive votes from finance ministers representing the 27 member states, along with amendments to various regulations and directives associated with the new legislation.
In addition to the adoption of MiCA, the European Parliament also approved two other pieces of legislation. These include a regulation pertaining to information accompanying transfers of funds and certain crypto assets. The formal adoption of MiCA by the European Parliament on April 20 sets the stage for final approval by the European Council before the regulatory parameters come into effect.
The legislation establishes explicit regulatory guidelines and prerequisites for utilizing cryptocurrencies and associated services and activities across the European Union. It encompasses a wide range of cryptocurrencies, digital assets, utility tokens, and stablecoins.
To become EU law, the next step in the lengthy process for MiCA involves its publication in the Official Journal of the European Union. MiCA is expected to take effect within a year, indicating that the regulations will officially become law in the middle of 2024.
Initially proposed by the European Commission in September 2020, MiCA has encountered various challenges and delays during its journey through the legislative process.
The legislation has received widespread acceptance from cryptocurrency service providers and advocates due to its establishment of a unified market environment across Europe, ensuring consistent regulatory requirements and operational procedures. Key elements of the MiCA legislation include the imposition of registration and authorization criteria for cryptocurrency issuers, exchanges, and wallet providers.
Stablecoin issuers will need to fulfill specific security and risk mitigation requirements, while custody services for cryptocurrencies must implement adequate security measures to address potential cybersecurity and operational risks.
Moreover, the legislation presents a framework to prevent market abuse, insider trading, and manipulative activities within the cryptocurrency realm.
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