The EU Parliament has approved a “Regulation on the transmission of information accompanying transfers of funds and certain crypto-assets”. MEPs also approve the draft “Markets in Crypto Assets” (MiCA) Regulation. They thus confirm the compromises found in June 2022 from the so-called trilogue negotiations with the Council and the Commission.
Anonymous exchange made difficult
According to the regulation on the obligation to provide information, crypto trading venues in the EU will in future have to determine the identity of people who transfer or receive crypto assets such as Bitcoin for payments or donations, regardless of their equivalent value in national currencies. The EU wants to make value flows traceable and, in particular, curb money laundering by allowing authorities to better control the exchange between state currencies and crypto assets.
Trading in crypto assets such as Bitcoin will soon be subject to much stricter rules in the EU.
(Bild: Fernando Gutierrez-Juarez )
The regulation also covers “unhosted wallets” held by individuals without crypto trading exchanges or service providers. This applies in any case if you, as a customer of such services, send more than the equivalent of 1000 euros to your unhosted private wallet or receive it from this wallet. The exchange or service provider must then ensure that the wallet actually belongs to the customer. The only exceptions are transfers between two private unhosted wallets.
MiCA: More protection for people and the climate
The MiCA regulation aims to better protect consumers and investors from fraudulent activity and manipulation on crypto marketplaces. Providers of crypto-related services within the EU will in future require approval from a national financial supervisory authority. Two years after MiCA came into force, the EU Commission is also to submit proposals to curb the negative effects of crypto trading on the environment and climate.
To this end, the national authorities collect data which they transmit to the European Securities and Markets Authority. Excluded from MiCA are Non-Fungible Tokens (NFT), the holders of which acquire ownership rights to real objects such as art, provided that the NFTs do not fall under existing categories of crypto assets.
Strict rules for stablecoins
MiCA is also intended to ensure financial stability. In addition, the regulation creates high hurdles for stablecoins such as Tether. Such crypto assets are tied to real monetary assets such as a government currency, a basket of currencies, or assets such as stocks. In the future, issuers of such crypto assets will have to prove a liquidity and deposit reserve in a ratio of 1:1 in order to completely prevent payment defaults.
The holders of such values are entitled to a free exchange at any time. If a stablecoin is growing quickly, its total daily transaction volume must not exceed 200 million euros. Stablecoin issuers must open a presence within the EU if they want to serve the EU market. They are liable to their customers if their crypto assets are lost.
After the EU Commission and Parliament, the package of regulations now lies with the EU Council. His approval is considered safe. After an 18-month transition period, the regulations will come into force as EU law. While many politicians and experts welcomed the regulation, there were also critical voices questioning its effectiveness.
(Bild: c’t 11/2023 )
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