June 22, 2022

EU Moves Closer to Agreement on Regulation of Cryptocurrency

  • The EU is getting closer to an agreement on a legislative package that will regulate cryptocurrencies within the union state.
  • According to media reports, the agreement may be adopted in June of this year.

A Bloomberg report shows that the union of twenty-seven countries is getting closer to establishing regulation of cryptocurrencies in the union. France, the current presidency of the European Union is positive about crypto-assets and urges the union to adopt an agreement by the end of this month. Bloomberg reporters familiar with the situation are reporting on a possible meeting of lawmakers on June 30.

The long-awaited agreement is expected this month

According to existing data, representatives of relevant institutions in the European Union are approaching consensus on the Markets in Crypto Assets (MiCA) proposal aiming to introduce union-wide rules for the crypto industry. Sources who wished to remain anonymous said that French lawmakers are quite positive about the crypto-sphere at the moment, and are going to discuss it at two upcoming meetings on June 14 and June 30. The 27-member bloc’s member states and parliament continue to disagree on several aspects of MiCA. These include the oversight of crypto-asset service providers (CASPs), the potential inclusion of non-fungible tokens (NFTs) in the structure, and the regulation of stablecoins.

Responsible officials of the Union are still discussing some points, for example, a branch of the discussion is to find a way to limit payments in stabelcoin not denominated in euros. The discussion accelerated after the collapse of the Terra Algorithmic Stablecoin (UST). Protecting investors and assessing the impact of cryptocurrencies on financial stability are two other important aspects.

Environmental impact of crypto

Parliament is also pushing for a ruling on the environmental impact of crypto-assets in legislation in step with the people. Bitcoin mining depends on the misuse of Brobdingneg’s computing power for transactions, which consistently consumes a lot of energy.

According to people, the French presidency is ready to simply accept the EU Commission’s proposal to disclose CASP’s energy consumption. In addition, MPs need the EU executive to provide technical standards for such disclosure along with a revision clause.

Member states and parliament also disagree with the inclusion of anti-money laundering clauses in the utility package. National governments are thinking about having a separate set of rules for this, while lawmakers need to make a list of CASPs that do not comply with anti-money laundering rules.

Related: EU lawmakers demand urgent cryptocurrency regulations amid soaring inflation