Legal Informer: The EU Council has Adopted New Rules for Europe’s Cryptocurrency Markets
The European Union Council has granted final approval to new regulations for crypto assets and markets in the EU. This decision marks the culmination of a lengthy and complex legislative process,
establishing what is widely recognized as the world’s first comprehensive legal framework for digital assets, including Bitcoin.
The approval follows a provisional agreement reached last year, which resulted from trialogue negotiations involving the European Parliament, the Commission, and a vote by EU lawmakers in April of this year. Composed of the finance ministers of member states, the EU Council
has adopted the Markets in Crypto Assets (MiCA) legislation. MiCA is a licensing law introduced by the European Commission (EC) to prioritize financial stability, investor protection, and the promotion of widespread transformation within the crypto asset sector across EU countries.
MiCA forms part of a larger digital finance package aimed at developing a unified European approach. This comprehensive package includes a digital finance strategy, the Digital Operational Resilience Act concerning crypto service providers, and a proposal for a distributed ledger technology pilot regime for wholesale applications.
The legislation’s primary objective is to regulate the supervision, consumer protection, and environmental safeguards concerning digital assets, encompassing cryptocurrencies like Bitcoin.
Additionally, the new rules extend to cover utility tokens, asset-referenced tokens, and stablecoins. By implementing this set of rules, crypto assets, their issuers, and crypto service providers are brought under a Union-wide regulatory framework.
Establishing clear rules for a unified market, this regulation is designed to address the recent volatility and decline in the value of digital currencies, highlighting their risky and speculative nature.
The need for regulation has become increasingly critical, positioning Europe as the first continent to implement comprehensive regulations for crypto assets.
Considering the recent announcement of the Nigerian government’s strategy for Blockchain Adoption, which includes six key initiatives, and the SEC’s Rule on Issuance Offering and Custody of Digital Assets, it is noteworthy that they are already aligning with the forthcoming legislation from other countries and continents.