The Markets in Crypto Assets (MiCA), the European Union’s landmark cryptocurrency regulation, has received unanimous approval from European finance ministers, marking a significant step in the legislative process. The approval came during a meeting of the EU’s Economic and Financial Affairs Council (EcoFin), consisting of finance and economic ministers from all 27 EU countries, with relevant European commissioners also participating in meetings.
Elisabeth Svantesson, Sweden’s minister for finance and the chair of the meeting, expressed satisfaction with the adoption, which signals the final step in the legislative process. The regulation is expected to become law this summer, at which point it will be entered into the EU’s official journal.
Protecting Investors and Combating Financial Crimes
Svantesson highlighted that recent events have underscored the urgent need for rules that will better protect Europeans who have invested in crypto assets and prevent misuse of the crypto industry for money laundering and terrorism financing purposes. MiCA, which creates a uniform approach to crypto across the European bloc, was passed by members of the European Parliament last month in Strasbourg.
Following its entry into law, there will be an implementation period to allow regulators and companies time to adapt to the new rules before they are fully enforced. Some rules related to stablecoins will be implemented in a year, but others will not be enforced for 18 months.
A Warm Welcome from the Crypto Industry
The introduction of a consistent set of rules for crypto in the EU has been widely welcomed by the industry and regulators alike. Last week, the SEC’s Hester Peirce said MiCA could even serve as a “model” for the U.S. approach to regulating the sector. Reacting to today’s approval, Billy Sebell, executive director of blockchain project XDC Foundation, noted that the EU was “placing a positive marker on blockchain technology.”
Crypto Assets Under the Anti-Money Laundering Radar
In addition to MiCA, EcoFin also adopted regulations on information accompanying transfers of funds and certain crypto-assets. These rules extend anti-money laundering rules to crypto, marking a significant step forward in the fight against money laundering.
In terms of taxation, local tax authorities will now be mandated to share information with each other to ensure cross-border crypto transactions do not evade taxation. The newly adopted rules have made it impossible for illegal activities to use crypto-assets in Europe without exposure, making it an important step forward in the fight against money laundering.
The First Major Jurisdiction with a Crypto Licensing Regime
The unanimous approval of MiCA by the finance ministers of the European Union makes the bloc the first major jurisdiction in the world with a crypto licensing regime. It has also agreed to new anti-money laundering measures on crypto funds transfers, signaling a new era in crypto regulation.
