The European Union will finalize the bill on the regulation of cryptocurrencies in June

The European Union will finalize the bill on the regulation of cryptocurrencies in June

The European Union will finalize the bill on regulation of cryptocurrencies in June

On June 30, 2022, the European Parliament, the European Commission and the Council of the EU will hold a final meeting on the MiCA cryptocurrency regulation bill. Patrick Hansen, Development Manager at Unstoppable Finance, told this.

He emphasized that all “important” issues have already been agreed, but there are several open topics.

The European Commission wants to include NFT in the scope of MiCA, arguing that it is necessary to protect consumers. The Council of the EU and the European Parliament initially opposed, but, according to Hansen, have now made concessions.

“The likely result will be a compromise – token issuers will be released [from MiCA], but companies (marketplaces, etc.) providing NFT-related services will be required to comply law. They will need a CASP license (small players may not),” he wrote.

Hansen noted that lawmakers are not going to make exceptions for algorithmic stablecoins. High regulatory requirements will be set for EMT and ART issuers, and CASPs will be prohibited from accruing interest on stablecoin deposits.

The specialist added that the “trilog” has yet to define “meaningful” stablecoins and approve the architecture oversight of segments. 

He also stated that the decentralized finance sector was not included in the scope of MiCA. In 2023, the European Commission will publish a separate report on this issue and launch a pilot project for a new form of “built-in DeFi supervision”.

It is assumed that all CASPs will be subject to disclosure requirements for each crypto asset with which they operate. The list of data will be approved by the European Securities Market Supervisory Authority.

According to Hansen, officials also need to determine the provisions on combating money laundering and terrorist financing, precise regulatory frameworks, as well as implementation timelines.

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“Then, before the MiCA enters into force, a vote on the adopted compromise will take place at the plenary session of the Parliament,” he explained.

In March 2022, the European Parliament supported amendments to the regulation on the exchange of information between counterparties, which involve the collection of data about users of non-custodial cryptocurrency wallets.

Digital asset transactions are not subject to the de minimis principle, so all transfers, with the exception of P2P transactions, will be subject to the Transfer of Funds Regulation (TFR). 

Hansen explained that The European Parliament advocates the mandatory identification of CASP “non-hosting” counterparties when making transactions. He noted that the EU Council and the European Commission are against such a decision.

“Instead, the Council proposes a risk-based approach, in line with the requirements of Germany, where CASPs should consider the risks associated with money laundering based on blockchain analytics and take appropriate measures to mitigate them depending on the result,” he wrote.

The specialist stressed that, unlike MiCA, amendments to the TFR may not be finalized in June, as the European Parliament does not want to give up its demands.

Recall that in April 2022, representatives of the cryptocurrency industry called on the EU to abandon the tightening of regulation.

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