MEPs approved rules for cryptocurrencies on Thursday, a first step at a time when several regulators around the world are trying to regulate this sector. The MiCA (Markets in Crypto-assets) regulation, which aims in particular to fight against money laundering and the financing of terrorism, was voted by a large majority. So far, transfers of virtual assets, such as bitcoins, escaped European legislation on financial services.
“With the MiCA regulation, the European crypto-asset industry has regulatory clarity that countries like the United States do not have,” welcomed rapporteur Stefan Berger (PPE). But voices have tempered the impact of these new rules. “Crypto players will be able to start applying the basic rules of traditional finance,” MEP Aurore Lalucq (Socialists and Democrats group, left) said during the debates on Wednesday. “It’s good, it’s better than nothing, is it enough? No,” she said.
The MEP notably regretted the planned application deadlines, explaining by way of example that the largest cryptocurrency exchange platform in the world, Binance, “will only be able to comply with MiCA in 18 months, 18 months during which savers will therefore have no protection”. In early April, Elizabeth McCaul, a member of the ECB supervisory board, had called in a blog post to push the efforts even further.
Concretely, under the new European legislation, crypto-asset service providers (CASP) will have to register and provide precise data on their identity if they wish to operate in the EU. The “Travel Rule”, already existing in traditional finance, will apply in the future to transfers of crypto-assets. It will require crypto-asset service providers to transmit certain information about customers and transactions to the financial institution receiving these transactions. In order to reduce the high carbon footprint of cryptocurrencies, larger service providers will additionally have to disclose their energy consumption.