By
Bhushan Akolkar
April 15th, 2024
The discussion will continue till June 30. Then, the EU is expected to announce the final decisions at a meeting of representatives from the European Parliament, the European Commission, and the Council of the European Union.
The European Union (EU) is finalizing its crypto regulation guidance that includes Markets in Crypto-Assets (MiCA) and Transfer of Funds Regulation (TFR), expecting to get it done by the end of this month. Among the latest regulations being discussed by the EU is a ban on stablecoin deposit interest. According to tweets from Patrick Hansen, crypto venture advisor at Presight Capital and head of the strategy at Unstoppable Finance firm, lawmakers are considering high regulatory requirements for issuers of any stablecoins, without exceptions for algorithmic stablecoins. This will make a huge difference in the crypto market.
1/ The two most important EU crypto regulations to date, MiCA ("PoW-ban") & TFR ("unhosted wallets"), are about to be finalized by the end of June.
They have huge implications for the crypto market in the EU and beyond.
Here is a quick update thread on both regulations 👇
— Patrick Hansen (@paddi_hansen) June 25, 2022
The discussion will continue till June 30. Then, the EU is expected to announce the final decisions at a meeting of representatives from the European Parliament, the European Commission, and the Council of the European Union.
Notably, the key bills, MiCA and TFR, will cover all the crypto-related issues. The EU has already finalized the major point, only minor details are pending.
Speaking of stablecoins, there is a need to decide who would be responsible for supervising these assets. Since the collapse of Terra, they have been a burning issue. The choice is between supervision of stablecoins by national bodies or through a uniform continental institution.
According to Patrick Hansen, apart from a ban on stablecoin deposit interest, the EU will decide whether MiCA should cover non-fungible tokens (NFTs). Initially, the Commission wanted it to be within the scope of the bill, while the Council and Parliament were against it. Now, seems that the regulators have reached a compromise. As the popularity of NFTs has significantly grown, the EU wants to protect consumers by requiring NFT platforms to get special licenses to operate.
As fr s Bitcoin (BTC) is considered, it is not a priority at the moment. The meeting will not be discussing a ban on Bitcoin mining, however, there will be strict requirements for crypto assets service providers on the environmental impact. In the future, the EU is planning to introduce special conditions for every individual digital asset.
More About MiCA
Markets in Crypto-Assets (MiCA) is a proposed crypto-regulation in EU law. It was first introduced on 24 September 2020 with the aim to transform the European economy in the coming decades. MiCA will consist of 168 pages with a focus on rules to regulate currently out-of-scope crypto-asset types such as stablecoins and crypto-asset service providers (CASPs).
Once adopted, MiCA will be applicable across the European Union (EU) to all member states. It will provide clear guidance on crypto-assets regulation, protecting customers and allowing crypto companies to enjoy the benefits of Europe’s internal market for financial services.