• The European Parliament voted 517-38 in favor of the Market in Cryptoassets (MiCA) regulatory framework.
• MiCA will introduce clear standards and will protect investors from crypto-related crashes and scandals.
• A separate law, the “travel rule”, will be enforced requiring digital asset operators to identify their clients about any transfer of their funds to prevent money laundering.
EU Lawmakers Give Final Approval to the MiCA Crypto Legislation
The European Union (EU) Parliament has given its official blessing to the Market in Cryptoassets (MiCA) – a regulatory framework that could set clear standards and protect investors from crypto-related crashes and scandals. The approval comes approximately five months after the infamous FTX collapse and aims to protect investors from such failures.
What is MiCA?
MiCA licensing policy should become official from the start of 2025. It sets out requirements for digital asset service providers, including establishing operating conditions for services like exchange platforms, wallet providers, etc., as well as introducing rules on transparency obligations for issuers of crypto assets.
Travel Rule
The EU parliament also supported a separate law requiring digital asset operators to identify their clients about any transfer of their funds to prevent money laundering, known as the “travel rule”. It will cover cryptocurrency transactions providing customers with information about the source of the assets and its beneficiary if they are worth above €1,000 (around $1,100). This rule does not cover person-to-person transactions.
Reaction From Officials
Mairead McGuinness – the European Commissioner for Financial Stability, Financial Services, and Capital Markets Union praised MiCA legislation as world’s “first comprehensive crypto rules” saying that it is very much needed due to multiple crashes and scandals that shuttered the industry last year.
Conclusion
The approval by EU Parliament shows its commitment towards protecting citizens against unscrupulous activities related to cryptocurrencies while recognizing it as an opportunity for growth and innovation in Europe’s financial sector.