New EU Legislation Sets Standards and Safeguards for Growing Crypto Asset Market

Uniform EU market rules for crypto-assets

The Plenary has given its final approval, with 517 votes in favour, 38 against, and 18 abstentions, to new common rules on the supervision, consumer protection, and environmental safeguards of crypto-assets, including cryptocurrencies (MiCA).

These rules will apply to crypto-assets that are not currently covered by existing financial services legislation.

The main aim is to ensure transparency, disclosure, authorization, and supervision of transactions involving the issuing and trading of crypto-assets such as asset-reference tokens and e-money tokens. Consumers will be better informed about the risks and costs associated with these operations.

Furthermore, the new legal framework will support market integrity and financial stability by regulating public offers of crypto-assets.

The agreed text also includes measures to prevent market manipulation, money laundering, terrorist financing, and other criminal activities.

The European Securities and Markets Authority (ESMA) will set up a public register for non-compliant crypto-assets service providers that operate in the European Union without authorization.

To reduce the carbon footprint of crypto-currencies, significant service providers will have to disclose their energy consumption.

Overall, the new rules aim to provide safeguards against market manipulation and financial crime while promoting transparency, consumer protection, and environmental responsibility in the crypto-asset industry.

What's next?

The next stage is for the Council to formally approve the texts before they are published in the EU Official Journal. Once published, they will become effective 20 days later.

By passing this legislation, the Parliament is addressing the public's demand to establish guidelines and protections for the use of blockchain technology, as outlined in Proposal 35(8) of the Conference on the Future of Europe's conclusions.