EU Council votes unanimously for MiCA legislation

EU Council votes unanimously for MiCA legislation

The Economic and Financial Council of the European Union unanimously voted in favor of regulating the markets for crypto assets (MiCA) in a voting process on May 16, 2023.

The finance ministers of the 27 member states approved the MiCA law, including changes to several rules related to the new crypto legislation.

EU Council approves MiCA law

The EU Council's approval comes less than a month after the European Union Parliament approved the MiCA bill. On April 20, EU lawmakers voted in favor of the new crypto licensing directive by 517 votes to 38.

The new legislation, which sets comprehensive regulatory guidelines for crypto assets and related services across the EU, covers a wide range of digital assets, including utility tokens and stablecoins.

The MiCA draft law, first submitted to the European Commission in 2020, has become one of the first comprehensive regulatory frameworks for the crypto industry. The law aims to regulate cryptocurrency issuers, exchanges and wallet providers by establishing registration and authorization requirements.

Stablecoin issuers would also have to meet certain criteria such as security and risk mitigation strategies. At the same time, crypto custody service providers would need to implement security measures to address potential cybersecurity and operational failures. The EU believes that the MiCA bill will help prevent market abuse, manipulative tactics and insider trading in the crypto space.

MiCA will go live in 2025

Since the EU Parliament and the EU Council have given the green light to the MiCA policy, the next step would be publication in the EU Journal. Stablecoin regulations are expected to come into effect in mid-2024, while broader crypto service provider rules could come into effect from January 2025.

In addition to MiCA, the EU intends to implement the Travel Rule guidelines from January 2025. The rule will address crypto transactions and requires customers to be provided with information about the source of assets and the beneficiary. The travel policy, which applies to transfers of more than 1,000 euros (approximately $1,100) from crypto wallet addresses to private users, does not apply to person-to-person transactions.

Meanwhile, several industry leaders have praised the new rules, saying they encourage innovation in the crypto sector while protecting consumers. Some have also called on US authorities to introduce clear regulations for the crypto industry to prevent an exodus of companies and talent.

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