The Market in Crypto-Assets (MiCA) legislation has received unanimous approval from the members of the European Union (EU), which marks a significant step towards implementing stricter regulations for cryptocurrencies within the EU.
The Economic and Financial Affairs Council of the European Union, composed of finance ministers from all member states, has approved the new regulation. This approval came after a vote on May 16, with finance ministers from all 27 member states voting in favor of the MiCA bill and amendments to related regulations and directives.
Earlier in April, lawmakers in the European Parliament gave their seal of approval to an unprecedented set of regulations designed to govern the cryptocurrency industry. An momentous vote took place, resulting in 517 members of the EU Parliament voting in favor of MiCA, while only 38 voted against it. This historic legislation aims to safeguard consumers by mitigating risks associated with purchasing crypto assets, holding providers accountable for any potential loss of investors’ crypto-assets.
In conjunction with the adoption of MiCA, the European Parliament also approved two additional pieces of legislation. These include regulations addressing the information accompanying transfers of funds and certain crypto assets. These complementary regulations further contribute to the comprehensive regulatory framework being established by the European Union.
During the debate preceding the vote, lawmakers discussed the requirement for crypto wallet providers and exchanges to obtain a license to operate across the European Union.
Under the approved MiCA regulation, platforms operating in the European Union will have an obligation to provide consumers with clear and comprehensive information about the risks associated with their services.
Meanwhile, stablecoin issuers will be required to maintain sufficient reserves to back their stablecoins and ensure they can meet redemption requests in the event of mass withdrawals. Additionally, if a stablecoin reaches a significant size, it may be subject to further restrictions. Specifically, stablecoins that exceed a certain threshold may be limited to conducting transactions of up to 200 million euros ($220 million) per day. This limitation is likely implemented to address concerns related to financial stability and systemic risk.
