EU Council Unanimously Votes in Favor of MiCA Legislation

The Council for Economic and Financial Affairs of the European Union unanimously favored the regulation of markets in crypto assets (MiCA) during the vote on May 16, 2023.

Finance ministers of the 27 member states consent The MiCA Bill, including amendments to several rules related to the new cryptocurrency legislation.

The Council of the European Union approves the MiCA bill

The approval from the Council of the European Union comes less than a month after the EU Parliament accepted the MiCA bill. On April 20, EU lawmakers voted 517-38 in favor of a new crypto-licensing policy.

The new legislation, which establishes comprehensive regulatory guidelines for crypto assets and related services across the European Union, covers a wide range of digital assets, including utility tokens and stablecoins.

MiCA was first proposed to the European Commission in 2020 and has emerged as one of the first comprehensive regulatory frameworks for the crypto industry. The legislation seeks to regulate cryptocurrency issuers, exchanges, and wallet providers by setting registration and licensing requirements.

Stablecoin issuers will also need to meet specific criteria such as security strategies and risk mitigation. At the same time, cryptocurrency service providers will have to implement security and safety measures to deal with potential cybersecurity and operational failures. The EU believes that the MiCA bill will help prevent market abuse, manipulation tactics and insider trading in the crypto space.

MiCA will go live in 2025

Since the EU Parliament and Council have given the green light to the MiCA policy, the next step will be to publish it in the EU Journal. The regulations for stablecoins are expected to come into force halfway through 2024, while the broader rules for crypto service providers could come into effect from January 2025.

Along with MiCA, the EU intends to implement the Travel Rule Guidelines from January 2025. The rule will deal with crypto transactions, requiring customers to provide information about the source of assets and the beneficiary. The travel policy, which will apply to transfers of more than 1,000 euros (about $1,100) from crypto-wallet addresses to private users, will not apply to personal transactions.

Meanwhile, several industry leaders applauded the new rules, noting that they encourage innovation in the crypto sector while protecting consumers. Some have also urged US authorities to apply clear regulations to the crypto industry to prevent an outflow of companies and talent.