- The European Parliament voted in favor of the law by a margin of 28 to 1.
- It also requires stablecoin businesses to have sufficient capital.
Europe has taken a significant step toward regulating the cryptocurrency market. European Union legislators approved the Markets in Crypto Assets Regulation (MiCA) today. A historic piece of legislation that seeks to regulate the digital asset industry inside the EU.
The European Parliament voted in favor of the law by a margin of 28 to 1. Meaning that if it passes in the next vote, crypto firms would be subject to more stringent regulations. The MiCA law requires crypto issuers to make public a “crypto-asset white paper” outlining their plans for the cryptocurrency.
Stringent Regulations Applicable
It also requires stablecoin businesses to have sufficient capital: if their tokens aren’t valued in euros or other currencies utilized by E.U. member states, their issuance will be capped.
Stablecoins, unlike volatile cryptocurrencies like Bitcoin or Ethereum, are intended to maintain a stable value by being tied to a stable fiat currency, such as the U.S. dollar.
The MiCA also plans to control the mining of cryptocurrencies. The measure mandates that large “crypto-assets service providers” be transparent about their energy use. Cryptocurrency mining consumes a lot of energy, and coins like Bitcoin produce more greenhouse gas emissions than other nations.
According to University of Kentucky law professor Brian Fyre, who specializes in NFTs and securities law, the E.U. might categorize these unique tokens generated on a blockchain and tied to assets like artwork as securities under the new bill.
Legislators in the European Union have been discussing MiCA for over two years. In attempt to tame the “Wild West of the crypto-world,” as MEP Stefan Berger put it, the economic union is actively striving to do so.
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