European Union (EU) Officials Agree on MiCA Rules Referring to Them as ‘Landmark Rules to End Crypto Wild West’

Regular audits by independent auditors will also be mandated for token issuers within the EU.

Diplomats representing the 27 countries of the European Union (EU) have agreed on a draft regulation document containing rules to govern cryptocurrency businesses in the region.

The rules are referred to as ‘Markets in Crypto Assets Regulation (MiCA),’ and if approved by the European parliament, will introduce a licensing regime for crypto services, including wallet providers and exchanges across all nations.

In July 2022, French Finance and Economy Minister,  Bruno Le Maire, described MICA as a landmark regulation that will put an end to the crypto wild west and confirm the EU’s role as a standard-setter for digital topics.

In the draft, crypto-asset service providers will have to respect strong requirements to protect consumers’ wallets and become liable in case they lose investors’ crypto-assets. These businesses will also need authorization in order to operate within the EU.

Moreover, MiCA will be introduced alongside a requirement for wallet providers to check their customers’ identities, in a bid to cut money laundering.

At the same time, token issuers will be required to resolve any customer complaints in a timely manner.

It is also expected that the European Banking Authority (EBA)  will supervise stablecoins, with the presence of the issuer in the EU being a precondition for any issuance. 

The investment of reserve assets, including any associated risks will be the responsibility of the token issuer.

Regular audits by independent auditors will also be mandated for token issuers within the EU.

Token holders will also have the right and ability to liquidate their assets at any time.

The stablecoins will also come under strict requirements. The draft rules include a mandate for authorities to make stipulations to stablecoin issuers concerning reserve liquidity. It is expected these will entail provisions on minimum liquidity.

Check out the full regulation draft here.



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