Comprehensive Crypto Legislation Gets Nod from EU Lawmakers
In a significant move, European Union lawmakers have endorsed a novel cryptocurrency licensing system, known as Markets in Crypto-Assets (MiCA), with a landslide vote of 517-38. This makes the European Union the first major jurisdiction worldwide to implement a comprehensive law governing cryptocurrencies.
In parallel, the European Parliament has also voted 529-29 in favor of another law, the Transfer of Funds regulation. According to this new law, cryptocurrency operators will be required to identify their customers to effectively combat money laundering, with 14 lawmakers abstaining from the vote.
Crypto Exchanges and Wallet Providers to Require Licenses
These decisions came in the wake of a debate on Wednesday, during which the majority of lawmakers were inclined towards mandating that cryptocurrency wallet providers and exchanges obtain a license to operate.
Mairead McGuinness of the European Commission tweeted about the vote, describing it as a 'world first' in terms of cryptocurrency regulation.
McGuinness emphasized the protective aspects of these rules, stating, "We're safeguarding financial stability and market integrity, while also protecting consumers. These rules will come into effect starting from next year."
European Parliament Statement and Industry Reactions
In a statement released by the European Parliament, Stefan Berger, the lawmaker in charge of negotiating the law, asserted that these rules position the EU "at the forefront of the token economy."
Berger elaborated, "The European crypto-asset industry now has regulatory clarity, something that is lacking in countries like the U.S. The sector that was affected by the FTX collapse can regain trust."
The European Securities and Markets Authority (ESMA) has also responded positively to the vote. In a tweet, the ESMA mentioned that it will "announce in due course" the timeline for devising the secondary legislation under MiCA, while cautioning consumers about the inherent risks involved in investing in crypto assets.
The European Commission initially proposed the Markets in Crypto Assets regulation back in 2020. The primary provisions are expected to be enforced approximately 12 months after being published in the EU's official journal.