From Anarchy To Order: EU's Game-Changing Crypto Laws To Reign In The Digital 'Wild West'

During a debate on Wednesday, legislators from various political parties within the European Union expressed their ongoing support for the pivotal Markets in Crypto Assets (MiCA) regulation.

This suggests that the licensing legislation is likely to be approved with ease in Thursday's scheduled vote, Coindesk reported.

MiCA, which had its primary political framework established last year, would enable cryptocurrency exchanges and digital wallet providers to offer regulated services throughout the EU.

It also mandates that stablecoin issuers maintain adequate reserves. Key political factions in the European Parliament, including the European People's Party, Socialists and Democrats, Renew Europe, and European Conservatives and Reformists, welcomed the proposed regulation.

If members of these parties vote in favor, the legislation is expected to secure the necessary majority for passage.

"Europe can be proud of the step we're taking today," said Lídia Pereira of the center-right European People's Party, the largest political group in the European Parliament.

European Commission's Mairead McGuinness emphasized the need for strict rules and supervision, citing the recent collapses of cryptocurrency companies and the TerraUSD LUNA/USD stablecoin.

She also mentioned the provisions designed to safeguard consumers, prevent market abuse, and combat money laundering.

German center-right legislator Stefan Berger, who spearheaded the parliamentary negotiations on MiCA, said that the regulation aims to "restore the trust that was damaged by the FTX case" and position the EU as a leader in the token economy.

Lawmakers also demonstrated support for a separate, contentious anti-money laundering measure called transfer-of-funds rules, which require crypto service providers to collect user identity information.

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Ernest Urtasun of the Greens party declared that the adoption of these regulations marks "the end of the 'Wild West' era for the unregulated world of crypto assets," which had previously served as a refuge for fraudsters and criminal networks.

Before the measures become law, they must be officially approved by both the European Parliament and the EU Council, which represents member states.

Administrative delays in finalizing and translating the text have slowed this process.

Once published in the EU's Official Journal, which is anticipated to occur in June, MiCA rules will take effect within 12 to 18 months.

This timeline could make the EU the first significant jurisdiction to implement comprehensive crypto legislation.

Meanwhile, Ilya Volkov, CEO and co-founder of YouHodler told Benzinga that there have been a number of questionable matters since the first draft, such as a discussion around a substantial environmental impact from the Proof-of-Work consensus mechanisms used for the validation of transactions or the classification of NFTs, for example, under the definition of cryptocurrency assets.

"In essence - there has always been doubt on the definition of crypto asset and what distinguishes a crypto-asset from the traditional definition of financial instrument under MiFID and how this distinction is created. However, I believe there would be nothing critical in case of the implementation of accurate definitions," he said. 

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