Policymakers in the European Union Commission are making progress towards a resolution on a regulatory framework designed to regulate the cryptocurrency market and associated matters in Europe thoroughly. According to reports in the media, an agreement on critical legislation could be reached as soon as this month.
Deal on EU Crypto Law Expected by End of June, Sources Say
Representatives of relevant institutions in the European Union are approaching consensus on the Markets in Crypto Assets (MiCA) proposal aiming to introduce union-wide rules for the crypto industry, Bloomberg reported, quoting knowledgeable sources.
They chose anonymity to explain that the French presidency of the EU Council and the European Parliament (EP) are now hopeful about resolving the concerns that have slowed the draft’s progress. At two next meetings, on June 14 and June 30, negotiators should do so.
According to people acquainted with the situation, the 27-member bloc’s member states and the Parliament continue to differ on key areas of MiCA. These include the regulation of stablecoins, the supervision of crypto asset service providers (CASPs), and the prospective inclusion of non-fungible tokens (NFTs) in the framework.
Officials are still discussing how to limit the use of stablecoins in payments. For example, there is an idea to introduce a ceiling for transactions that are not denominated in euros. It comes after last month’s collapse of the terrausd (UST) algorithmic stablecoin which affected crypto markets. Ensuring investor protection and gauging the impact of cryptocurrencies on financial stability are two other major considerations.
Discussions on Key Crypto Regulatory Aspects Continue
MiCA, which was first presented in 2020, was approved by the EP’s Committee on Economic and Monetary Affairs (ECON) in mid-March this year. The package entered the so-called trilogue stage of Europe’s legislative process later that month, during which the final draft must be coordinated between the European Parliament, the European Commission and the Council of the European Union.
A key element in the negotiations is also the need to address the environmental impact of crypto assets and some European lawmakers insist that the new legislation should take it into account. Provisions banning the energy-intensive proof-of-work mining sparked reactions from the Old Continent’s crypto community which complained they amounted to a bitcoin ban. The controversial texts were removed from the draft. France, which currently holds the EU presidency, is ready to accept a proposal by the Commission to disclose the energy consumption of CASPs.
Anti-money laundering rules in crypto legislation are also a source of contention among EU members and the union’s legislature. National governments are pressing for their own set of laws, while European legislators propose creating a list of CASPs that aren’t in compliance.