European Union Countries Are Reaching an Agreement on Crypto Adoption

European Union Countries Are Reaching an Agreement on Crypto Adoption
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ECONOMY

European Union Countries Are Reaching an Agreement on Crypto Adoption

The European Union is allegedly close to striking a regulatory framework agreement in the Markets in Crypto-Assets (MiCA).

06/14/2022

EU Lawmakers Approves Legislative Crypto Assets Regulation

The European Union is allegedly close to striking a regulatory framework agreement in the Markets in Crypto-Assets (MiCA). This framework refers to a legislative package that will be in charge of thoroughly regulating the cryptocurrency market and all connected activities in Europe.

According to sources, the EU is expected to sign the accord this month. This measure is designed to cover 27 member states and to establish the same standards for digital assets that would govern these member states.

Before reaching an agreement, the negotiators must address a number of other critical problems. There is a lot being addressed right now, including considerations about transaction size with dollar-backed cryptos.

Member states are also working on an anti-money laundering rule that will be incorporated into the regulatory framework, according to the report.

The Major Points of Contention In This Crypto Regulatory Framework

Negotiators will reconvene on June 14 and June 30 to address a few problems before reaching an agreement.

It has also been noted that the French presidency of the EU Council and European Parliament appears to be supportive of the concerns impeding the draft’s progress.

Despite this, the 27 member states, as well as the Parliament, are divided on several issues of MiCA.

Disagreements have arisen around the supervision of crypto asset service providers (CASPs), the prospective inclusion of non-fungible tokens (NFTs), and the regulation of stablecoins.

There is also ongoing debate regarding how to set a cap or limit on the use of stablecoins in payments. This step is being discussed due to the significant drop in TerraUSD (UST), an algorithmic stablecoin that has caused mayhem in the sector.

The primary goal is still to protect investors while also keeping an eye on the impact of digital currencies on financial stability.

Climate Related Disclosures Shall Be Mentioned

The final draft is meant to be coordinated by the European Parliament, the European Commission, and the European Union Council. The European Union also wishes to keep the climate-change debate alive.

The climate disclosures will aid in tracking Bitcoin’s environmental impact. There is a lot of discussion going on about specific regulations for cryptocurrency service providers.

This includes numerous revisions suggested to assist limit the use of proof-of-work, which is a consensus technique.

The European Parliament voted against incorporating in the MiCA framework a de facto ban on Bitcoin mining. This is because there has been a significant amount of pushback from industry members.

The European Union’s legislators have agreed a crackdown on anonymous cryptocurrency transfers. This draft bill is now undergoing trialogue talks.

By Elah Mae Ariate Wozinga Staff

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