The crypto sheriff is here

The crypto sheriff is here

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The European Union reached an agreement on the June 30 horn in Brussels to regulate cryptocurrencies through law Micathe draft of which had been under discussion for months in Brussels.

The regulation approved by the European institution covers all actors in the crypto market, whether they are issuers of cryptocurrencies such as bitcoin, issuers of stablecoins, trading platforms for any of these assets, or the wallets where they are guarded and stored.

“This regulatory framework will protect investors and preserve financial stability, while allowing innovation and promoting the attractiveness of the crypto-asset sector,” said the European Council in the statement issued after the approval of this regulatory framework.

The approval of this regulation, pointed from Brussels“will bring more clarity to the European Union“, since some Member States already have national legislation for crypto assets, but until now there was no specific regulatory framework at the continental level.

“This landmark regulation will put an end to the wild west of cryptocurrencies and confirm the role of the EU as a regulatory body on digital issues,” he said. Bruno LeMaireFrench Minister of Economy, Finance and Industrial and Digital Sovereignty.

Control over the carbon footprint, reserves, and money laundering of cryptocurrencies

The new regulations approved in Brussels will monitor a wide range of aspects to be taken into account by the cryptoactive industry.

On the one hand, crypto asset service providers will have to adhere to strict requirements to protect consumers’ wallets, and will be liable if they lose investors’ crypto assets.

The law Micaon the other hand, will also cover “any form of market abuse related to any type of transaction or service, in particular market manipulation and insider trading”.

Cryptoactive market players will also be required to declare information about their environmental and climate footprint.

An aspect that previously put in check the future of the MiCA lawby trying to impose that, within the future scenario imagined for cryptocurrencies, those that, like bitcoinwill use the proof of work or other methodologies of high energy consumption, will be prohibited.

Now the European Comission Two years are given to submit a report on the environmental impact of crypto assets, and the introduction of mandatory minimum sustainability standards for consensus mechanisms, including the mining method of proof of workwhich the ether intends to abandon in a few months.

The MiCA law, finally, will also provide that the European Banking Authority (EBA) is responsible for maintaining a public registry of crypto-asset service providers that do not comply with anti-money laundering regulations.

A monitoring that Spain it is structured in reverse, with the Bank of Spain being the institution in charge of accepting in its registry only those platforms that it considers to comply with the money laundering prevention laws.

Stablecoins do not escape the oblivion of NFTs

Despite the fact that NFT were excluded from the scope of application of the law MicaBrussels set a deadline of 18 months to prepare a comprehensive assessment of these assets, noting that, if deemed necessary, it will prepare a “specific, proportionate and horizontal legislative proposal to create a regime for NFTs and address the risks emerging from this new market”.

The assets that EU did not want to leave aside in this delimitation of the rules of the game for cryptocurrencies were the stablecoins, on which the European Council highlighted that “recent events have shown, once again, the risks that investors incur in the absence of regulation , as well as the impacts it has on other crypto assets.”

For that reason, the MiCA law seeks to protect consumers by obliging stablecoin issuers to constitute a reserve “sufficiently liquid, with a ratio of 1:1 and partly in the form of deposits”.

In addition, all stablecoins will come under the supervision of the ABEbeing the presence of the issuer in the EU a precondition for any issuance of new assets.

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