European Union (EU) Agrees on Regulatory Framework for Crypto – 7 African Countries Considered High-Risk

Crypto-asset service providers, whose parent company is located in countries listed on the EU list of third countries considered at high risk for anti-money laundering activities, as well as on the EU list of non-cooperative jurisdictions for tax purposes, will be required to implement enhanced checks in line with the EU AML framework.

0
117
JOIN US ON TELEGRAM

The EU is bringing crypto-assets, crypto-assets issuers, and crypto-asset service providers under a regulatory framework for the first time.

This follows an agreement between the institution’s bodies.

The Council presidency and the European Parliament reached a provisional agreement on the Markets in Crypto-Assets (MiCA) proposal which covers issuers of unbacked crypto-assets, and stablecoins, as well as the trading venues and the wallets where crypto-assets are held. 

The regulatory framework aims to:

  • Protect investors and preserve financial stability while allowing innovation and fostering the attractiveness of the crypto-asset sector
  • Bring more clarity in the European Union (EU) as some member states already have national legislation for crypto-assets, but so far, there had been no specific regulatory framework at EU level.

______________________________________________________________________

SEE ALSO: Kenya Denies Agreeing to Western-Led Declaration on Future of the Internet

______________________________________________________________________

According to Bruno Le Maire, a French Minister:

“This landmark regulation will put an end to the crypto wild west and confirms the EU’s role as a standard-setter for digital topics.”

– French Minister, French Minister, Economy, Finance, Industrial and Digital Sovereignty

The Rules

With the new rules:

  • Crypto-asset service providers will have to respect strong requirements to protect consumers wallets and become liable in case they lose investors’ crypto-assets. MiCA will also cover any type of market abuse related to any type of transaction or service, notably for market manipulation and insider dealing
  • Actors in the crypto-assets market will be required to declare information on their environmental and climate footprint
  • MiCA requires that the European Banking Authority (EBA) will be tasked with maintaining a public register of non-compliant crypto-asset service providers
  • Crypto-asset service providers, whose parent company is located in countries listed on the EU list of third countries considered at high risk for anti-money laundering activities, as well as on the EU list of non-cooperative jurisdictions for tax purposes, will be required to implement enhanced checks in line with the EU AML framework.

Tougher requirements may also be applied to shareholders and to the management of the CASPs, notably with regard to their localisation.

  • MiCA will protect consumers by requesting stablecoins issuers to build up a sufficiently liquid reserve, with a 1/1 ratio and partly in the form of deposits. Every stablecoin holder will be offered a claim at any time and free of charge by the issuer, and the rules governing the operation of the reserve will also provide for an adequate minimum liquidity

Furthermore, stablecoins will be supervised by the European Banking Authority (EBA), with a presence of the issuer in the EU being a precondition for any issuance.

  • Under the provisional agreement, crypto-asset service providers (CASPs) will need an authorization in order to operate within the EU. For now, Non-fungible tokens (NFTs), i. e. digital assets representing real objects like art, music, and videos, will be excluded from the scope except if they fall under existing crypto-asset categories.

______________________________________________________________________

RECOMMENDED READING: Bank of Uganda (BoU) Welcomes Crypto Businesses into its Regulatory Sandbox

______________________________________________________________________

Thank you for your support by helping us create content:

BTC address: 3CW75kjLYu7WpELdaqTv722vbobUswVtxT

ERC20 Address: 0x03139524428e40E31f13909f8D994C915FB91277

SOL address: 9cC65AWFHj848kntcoyiT8av3jiRQEqyTTmBR1GvVUb

____________________________________________________________________

Follow us on Twitter for the latest posts and updates

Join and interact with our Telegram community

_____________________

Subscribe to our YouTube channel below for more updates:

____________________________________________________________________

LEAVE A REPLY

Please enter your comment!
Please enter your name here