European Parliament adopts regulations for the cryptocurrency market

The new regulation, called MiCA (Markets in Cryptoassets, in English), also aims to ensure the traceability of transfers to better detect suspicious activities, including money laundering.

Until now, virtual asset transfers have been outside the scope of European financial services law.

By regulation, crypto asset service providers (called CASPs) must protect customers' electronic wallets and will be responsible if these assets are lost.

Additionally, they will have to disclose their energy consumption, as part of the EU's efforts to reduce the high carbon footprint of cryptocurrency mining.

A second regulation, known as Funds Transfer, should allow for greater oversight of the movement of cryptoassets, including cryptocurrencies, as is the case in traditional finance.

The EU argues this will make it more difficult for individuals or groups to use cryptocurrencies for illegal activities such as money laundering.

This regulation “will mark the end of the 'wild west' era in the unregulated world of cryptoassets,” said Spanish environmental MEP Ernest Urtasun, one of the main promoters of the initiative in the legislative plenary.

“For more than a decade, the lack of regulation has resulted in massive losses for many investors and provided a safe haven for fraudsters and international criminal networks,” the MEP added.

The rules will come into force progressively from July 2024.

The EU is also preparing proposals for a digital euro, which it hopes to present later this year.

(With AFP)

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