European finance ministers approved rules for the crypto asset market for the first time on Tuesday. The rationale is to make new technologies and products comply with financial regulations, but without hindering their use. Consumers and investors, on the other hand, must be better protected.
The ministers formally approved the political agreement they concluded with the European Parliament. The so-called MiCA law (Markets in Crypto-Assets) should protect investors in crypto assets and prevent their misuse. “This groundbreaking regulation will put an end to the wild west in cryptocurrency and reaffirms the EU’s standard-setting role in digital,” said French minister Bruno Le Maire when the deal was reached a year ago.
After the parliament, the member states have now also approved the law. The rules apply to providers of utility tokens, asset-referenced tokens (which maintain a stable value) and stablecoins (which always have the same value and are pegged to different currencies). The latter in particular would entail major risks for financial stability.
“I am very pleased that we are fulfilling our commitment to regulate the crypto asset sector,” said Swedish Minister Elisabeth Svantesson, who chaired the meeting. “We urgently needed rules to better protect Europeans who invest in assets and prevent misuse of the crypto sector – for money laundering and terrorist financing.”
Anti-Money Laundering Rules
The ministers approved a second regulation, which extends the existing anti-money laundering rules to crypto-assets. This too must prevent them from being used for criminal purposes. “The use of crypto-assets for illicit activities (…) will no longer be able to remain under the radar in Europe – an important step forward in the fight against money laundering,” says Svantesson.
Finally, an agreement was also reached on new transparency rules for crypto-asset trading. The existing rules for mandatory cooperation between national tax authorities will be expanded. The inherently decentralized nature of crypto-assets requires strong international cooperation to ensure effective tax collection. The DAC8 directive is precisely intended to update the tools in the fight against tax avoidance and fraud. In the same context, provisions are also included on cross-border rulings for the most wealthy persons.
Before this directive can be finally adopted, the opinion of the European Parliament is still required.
READ ALSO. Belgian crypto bank Bit4You bankrupt. “I have lost 30,000 euros and have not slept for two nights,” says the victim (+)
Free unlimited access to Showbytes? Which can!
Log in or create an account and don’t miss a thing of the stars.