EU parliamentarians announced on Thursday that the bloc’s lawmakers had reached an agreement on groundbreaking crypto regulations targeting digital assets. The guidelines include safeguards against market manipulation. As per the new regulations, transfers of cryptos will have data on both the sender and the recipient retained. This information will be shared with law enforcement agencies investigating money laundering or terrorism financing. In addition to this, they compel companies dealing in cryptocurrencies to publish information regarding the effect that their assets have on the environment.
We expect that this bill will be the world’s first complete regulatory framework for crypto assets. UK and US regulators have both warned of a need for tighter safeguards in the crypto sector. However, neither country has yet adopted such regulations. India, the world’s sixth largest economy, has a system for taxing digital assets, but the regulatory landscape is still hazy. In the EU, national operators only needed to show procedures for preventing money laundering. Therefore, these factors mean that crypto assets are essentially unregulated around the world.
EU legislator Ernest Urtasun said that EU states would be the primary regulators for crypto businesses. However, the bloc’s securities watchdog ESMA will have the power to intervene if there’s a greater threat against financial stability and investor interests. The regulations will grant crypto issuers and service providers the right to operate across the EU from a single location. The ability to comply with capital and consumer protection regulations is another plus.
The fact that the laws aim at crypto asset providers rather than cryptocurrencies themselves will undoubtedly be good news to many crypto enthusiasts. Even in the midst of the recent crypto-winter, this will help protect the assets from more bad sentiment. The MiCA (Markets in Crypto Assets) law could take effect by the end of 2023 at the latest.
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