EU Parliament Gives Green Signal On Crypto Licensing: All You Need To Know

European Commission's Mairead McGuinness said the new rules will be made applicable from next year.

Crypto operators will be mandatorily required to identify their customers in order to prevent money laundering cases.

Source : Getty

Lawmakers in the European Union Parliament on Thursday voted to allow and implement a new crypto licensing law Markets in Crypto-Assets (MiCA) with 517-38 votes in favour and 18 abstentions. After the votes, MiCA regulations can be implemented in 2024. With this, the EU becomes the first major region in the world to bring such a comprehensive legislation on cryptocurrency. Meanwhile, the EU also conducted votes with 529-29 in favour of the Transfer of Funds regulation, which is a different law.

According to the Transfer of Funds regulation law, crypto operators will be mandatorily required to identify their customers in order to prevent money laundering cases, reported CoinDesk.

During the ongoing debate on the matter, lawmakers extended their support for the plans to ensure that the wallet providers and exchanges get a license to function all over the bloc. It also said, as reported by CoinDesk, that the ones issuing stablecoins be associated with the value of different other assets in order to maintain adequate reserves.

The European Commission's Mairead McGuinness tweeted, “The rules will start applying from next year. We’re protecting consumers and safeguarding financial stability and market integrity.” She further hailed the vote to introduce the laws as a "world first" when it comes to crypto rules.

✅ I welcome the European Parliament’s vote today to approve comprehensive EU rules on crypto: a world first.

The rules will start applying from next year. We’re protecting consumers and safeguarding financial stability and market integrity. pic.twitter.com/cdn58rb9FA

— Mairead McGuinness (@McGuinnessEU) April 20, 2023

Meanwhile, in an official statement released by the European Parliament, Stefan Berger, the lawmaker who spearheaded the discussions on the law, stated the rules will ensure that the EU is "at the forefront of the token economy,” as cited by CoinDesk.

Barger further said, as quoted by the same report, "The European crypto-asset industry has regulatory clarity that does not exist in countries like the U.S." He also added that the sector and areas that suffered the damage in the wake of the FTX collapse could regain trust.

Amid this, the European Securities and Markets Authority also welcomed the move. The first such law known as The Markets in Crypto Assets regulation was proposed by the European Commission in 2020.

Commenting on the development, Mudrex CEO and co-founder Edul Patel told ABP Live, “It is one the first kinds of crypto regulations that would bring new rules for the industry across 27 countries in the EU. This comprehensive legal framework would encourage more technological innovations. It would also increase investor confidence in the crypto industry by promoting transparency, reducing fraud, and preventing money laundering."

"The new regulations will also lead to greater adoption of cryptocurrencies by businesses and individuals alike," Patel added. "Additionally, the regulations would now create a level playing field for crypto businesses and prevent unfair competition practices, ultimately fostering a healthier and more sustainable crypto ecosystem in the EU”.

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