Representatives from the European Parliament and EU states thrashed out a deal on the markets in crypto assets (MiCA) law, which is expected to come into force around the end of 2023.
Globally, crypto assets are largely unregulated, with national operators in the EU only required to show controls for combating money laundering.
“Today, we put an order in the Wild West of crypto assets and set clear rules for a harmonized market that will provide legal certainty for crypto asset issuers, guarantee equal rights for service providers and ensure high standards for consumers and investors,” said Stefan Berger, the lawmaker who led negotiations on behalf of the European Parliament.
MiCA will be the first comprehensive regime for crypto-assets in the world and will contain strong measures to guard against market abuse and manipulation, added Ernest Urtasun, a Green Party lawmaker in the parliament.
The new law gives issuers of crypto assets and providers of related services a “passport” to serve clients across the EU from a single base while meeting capital and consumer protection rules.
The United States and Britain, two major crypto centers, have yet to approve similar rules.
“We have agreed that crypto asset providers should in future disclose the energy consumption and environmental impact of assets,” Berger said.
EU states will be the main regulators for crypto companies, though the bloc’s securities watchdog ESMA will have powers to step in if investor protection or financial stability is threatened, lawmaker Urtasun said.
Crypto assets came under pressure after the collapse of TerraUSD and luna tokens last month, with major U.S. cryptocurrency lending company Celsius Network this month freezing withdrawals and transfers.
Bitcoin collapsed this month to around $17,600 and was trading around $18,900 on Thursday, well below its late March level of $48,200 as investors nurse losses.
