The collapse of the cryptocurrency exchange FTX and the unrest that followed highlighted the necessity for the regulation of cryptocurrencies. The EU’s widely awaited crypto laws have now received approval from the Council of finance ministers, moving Europe closer to being the first major region to have a legal framework governing crypto. Let’s examine EU crypto regulations and what they mean for other parties. The ‘wild west’ environment of cryptocurrencies has always been free from the reach of the law. However, the collapse of FTX and Sam Bankman-Fried’s arrest has re-ignited calls for international regulation of cryptocurrency. The efforts to regulate the cryptocurrency business have been spearheaded by the EU. Each action increases the pressure on nations like the US and the UK to make rules.
The Markets in Crypto Assets (MiCA) rule was initially put up by the European Commission in September 2020
The Markets in Crypto Assets (MiCA) rule was initially put up by the European Commission in September 2020. The laws were finally approved by the European Parliament last month after several obstacles. The law is one step closer to becoming a reality with the approval of the 27 member nations’ finance ministers. The publication of MiCA in the European Union Official Journal is the next step. A bill’s quick passage into law follows the European Council’s approval of it. Typically, it takes a year. By mid-2024, MiCA is anticipated to become legislation. MiCA establishes precise regulatory standards and guidelines for the use of cryptocurrencies and related services throughout the bloc. To operate in Europe, cryptocurrency businesses must obtain a license.
This covers cryptocurrency exchanges, wallet providers, and issuers. The need that stablecoin issuers to maintain adequate reserves is another important aspect of the policy. Additionally, insider trading and market abuse are prohibited by the legislation. “I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector,” said Elisabeth Svantesson, the finance minister of Sweden, which holds the council presidency. “Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of the crypto industry,” she added.
The attention is now on other markets as the EU gets closer to creating a complete framework to deal with cryptocurrencies
The attention is now on other markets as the EU gets closer to creating a complete framework to deal with cryptocurrencies. The architecture of the group also includes tax evasion and anti-money laundering procedures. Other nations should use this as a model. Recently, the UK’s finance minister declared that “robust” legislation for digital assets is in the works. When the UK will take greater initiative is currently unknown. Despite being at the center of the FTX crash, the US is still trying to figure out what it has to do. Although it appears that the country plans to regulate cryptocurrencies through legislation in 2023, it is now managing crypto assets through the current framework. India, meanwhile, believes that major international cooperation is necessary to regulate cryptocurrency.