EU parliament backs world’s first comprehensive rules for crypto assets

The parliament voted 517 in favour and 38 against on the world’s first comprehensive set of regulations for crypto-asset markets.

“This regulation brings a competitive advantage for the EU,” said Stefan Berger, the lawmaker who steered the rules through parliament.

“The European crypto-asset industry has regulatory clarity that does not exist in countries like the U.S.,” Berger said.

EU states have already given the nod to the rules which will be rolled out from mid 2024, requiring firms that issue and trade cryptoassets to be licensed by a national regulator, giving them a “passport” to serve customers across the 27-member country bloc.

Major service providers will have to disclose their energy consumption.

The rest of the world should copy European Union rules for cryptoassets to create a robust global approach that protects consumers and financial stability, the EU’s financial services chief said on Wednesday.The crypto sector has been rocked by the failure of crypto exchange FTX and other collapses, sending benchmark bitcoin prices tumbling, though it has begun to recover.

“I hope that our rules could become a model for other countries,” EU financial services commissioner Mairead McGuinness told the parliament on Wednesday.

MiCA requires crypto firms to be authorised by the EU to serve customers in the bloc, and to comply with safeguards against money laundering and terrorism finance.

It is being rolled out in phases from July 2024 to give the sector time to adapt.

Crypto firms authorised in one EU state would be allowed to offer their services across all 27. EU cities including Paris are already wooing firms in the sector.

“It marks the end of the Wild West era for cryptoassets,” Green Party lawmaker Ernest Urtasun told parliament.

But other countries need to play their part by introducing robust rules as well, said McGuinness, whose officials drafted MiCA. “Global convergence is absolutely key.”

Britain has just set out draft rules to regulate cryptoassets.

McGuinness said the commission will study whether further rules are needed for decentralised finance, and for lending and borrowing in cryptoassets.

“We believe had FTX been captured under the EU’s jurisdiction, many of its practices would not have been permissible under MiCA,” she added.