The Economic and Financial Affairs Council of the European Union unanimously favored the Markets in Crypto-Assets (MiCA) regulation during a voting process on May 16, 2023.
The Finance Ministers of the 27 member states approved the MiCA bill, including amendments to several rules related to the new crypto legislation.
EU Council Approves MiCA Bill
Approval from the EU Council comes less than a month after the Parliament of the European Union accepted the MiCA bill. On April 20, the EU lawmakers voted 517-38 in favor of the new crypto licensing policy.
The new legislation, which sets comprehensive regulatory guidelines for crypto assets and related services across the EU, covers a wide range of digital assets, including utility tokens and stablecoins.
First proposed to the European Commission in 2020, the MiCA bill has emerged as one of the first comprehensive regulatory frameworks for the crypto industry. The legislation seeks to regulate issuers of cryptocurrencies, exchanges, and wallet providers by specifying registration and authorization requirements.
Stablecoin issuers would also need to meet specific criteria like security and risk mitigation strategies. At the same time, crypto custody service providers would have to implement security and safety measures to handle potential cybersecurity and operational failures. The EU believes the MiCA bill will help prevent market abuse, manipulative tactics, and insider trading in the crypto space.
MiCA to Go Live in 2025
As the EU Parliament and Council have greenlighted the MiCA policy, the next step would be to publish it in the EU journal. The regulations for stablecoins are expected to come into effect mid-way through 2024, while the broader rules on crypto service providers could go live from January 2025.
Alongside MiCA, the EU intends to implement the Travel Rule guidelines from January 2025. The rule will address crypto transactions, requiring customers to be provided with information about the source of the assets and the beneficiary. The travel policy, which will apply to transfers worth more than €1,000 (around $1,100) from crypto wallet addresses to private users, will not apply to person-to-person transactions.
Meanwhile, several industry leaders have praised the new rules, stating that they encourage crypto sector innovation while protecting consumers. Some have also urged U.S. authorities to apply clear regulations to the crypto industry to prevent an outflow of businesses and talent.