EU Lawmakers Green Light Comprehensive Crypto Framework

The EU Parliament has passed a groundbreaking cryptocurrency bill known as the Markets in Crypto Act (MiCA). The legislation will become law in 2024, putting the EU ahead of the US and UK. The legislation will primarily protect crypto traders by making providers liable if they lose investors’ assets.

Stablecoins, like Tether, will now be required to maintain deep reserves to account for mass withdrawals. Stablecoins will also be limited to processing transactions worth no more than €200 million per day to make sure they do not grow too big.

The European Securities and Markets Authority (ESMA) will be given powers to ban non-compliant crypto platforms. The legislation also tackles environmental concerns by mandating firms to make their energy consumption known to the public.

This is not the end of legislative moves, with plans in place to tackle the anonymity involved in transfers of cryptocurrencies like Bitcoin. Firms will now be required to vet and communicate information on both sender and recipient to combat money laundering.

The new laws will also mean that crypto firms will be able to use their licenses in one European country to sell their services across various member states. Crypto companies have already been scrambling to obtain various European licenses and open new offices to be ready for the law coming into effect.

The world’s largest crypto exchange, Binance, received the news well, pledging to, “Make adjustments to our [their] business over the next 12-18 months to be in a position of full compliance.”