EU Approves Clear Rules For Crypto With MiCA Regulation

Key Points:

• The EU Council approves the MiCA legislation on cryptocurrencies and related services and activities across the European Union.
• The legislation sets down clear regulatory guidelines and requirements.
• The scope of the legislation covers a range of cryptocurrencies, digital assets, utility tokens and stablecoins.

On May 16, the highly-anticipated Markets in Crypto-Assets (MiCA) legislation was finally given the final green light by the European Union Council members.

The legislative bill, which sets down clear regulatory guidelines and requirements for the use of cryptocurrencies and related services and activities across the European Union, was passed following a voting process by 27 finance ministers representing the EU’s member states.

Amendments to a number of regulations and directives relating to the new legislation were also adopted by the EU parliament in conjunction with MiCA’s adoption. Along with the adoption of MiCA, two more pieces of legislation, including regulation on information accompanying transfers of funds and certain crypto-assets, were also approved by the EU parliament.

The European Parliament paved the way for final approval by the European Council before the regulatory parameters take effect as they formally adopted the MiCA legislation on April 20.

The scope of the legislation is extensive and covers a range of cryptocurrencies, digital assets, utility tokens, and stablecoins. This legislation is a significant step towards regulating the cryptocurrency industry in the EU and ensuring the safety and security of investors and users alike.

Later in the day, ministers also agreed on new measures to force crypto providers to disclose details of their customers’ holdings to tax authorities, which will be shared within the bloc in a bid to avoid stashing funds in secret overseas wallets.

“Crypto-assets and e-money have great potential to drive economic activity and innovation – but they also carry risks of reducing transparency and enabling tax evasion or fraud. Updating our tax rules to address these issues will help national administrations to collect tax more efficiently and keep up with evolving technology as Europe moves forward with its digital transition,” Valdis Dombrovskis, executive vice-president for an Economy that Works for People, said in a statement.

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