On Thursday, the European Union (EU) lawmakers voted for the landmark crypto legislation, Markets in Crypto Assets (MiCA). Sources suggest that the lawmakers passed the law with a huge margin of 517-38 and 18 abstentions.
This makes the European continent the first major jurisdiction in the world to introduce a comprehensive crypto law. In addition, the European Parliament voted 529-29 in favor of a separate law known as the Transfer of Funds regulation (TFR) with 14 abstentions. The TFR mandates crypto operators to identify their customers in a bid to halt money laundering.
The EU parliament passed the law after having a debate on Wednesday. In the discussion, the lawmakers largely supported plans to make crypto wallet providers and exchanges seek a license to operate across the continent and require issuers of stablecoins tied to the value of other assets to maintain sufficient reserves.
Mairead McGuinness, an EU official took to Twitter to share the news and described the vote as a “world first” for crypto rules. She said that they are protecting consumers and safeguarding financial stability and market integrity. Importantly, she also stated that the rules will start applying next year.
The official statement released by the EU parliament features Stefan Berger, the lawmaker who led negotiations on the laws. He said that the rules put the EU “at the forefront of the token economy.” In addition, he said:
The European crypto-asset industry has regulatory clarity that does not exist in countries like the US. The sector that was damaged by the FTX collapse can regain trust.
The European Securities Markets Authority (ESMA) also welcomed the vote in a tweet and said it will “announce in due time” its timetable for drafting secondary legislation under MiCA. Quoting the agency:
ESMA still warns consumers that investing in crypto assets is a risky endeavor with limited safeguards at this stage.
Notably, MiCA which has finally been passed was first proposed by the European Commission in 2020. To pass into law, the regulation has to be approved by the parliament and the EU’s Council, which represents the bloc’s member states. Sources reveal that the main provisions of the law will start to apply just over 12 months after publication in the EU’s official journal, likely in June.
The landmark crypto regulation has been passed by the continent following a series of delays involving months of drafting and translation. The vote was previously scheduled for Wednesday but was pushed for a day due to some reshuffling process. However, the vote was anticipated to be largely in favor of MiCA for a long time.
Countries across the globe have set their eyes on the EU as it makes its way through the crypto industry via its landmark MiCA legislation. While the executives have appeared to be largely in favor of the legislation, some have also expressed their counter opinion suggesting additions, etc, or highlighting its inadequacy.
In addition, Christine Lagarde, president of the European Central Bank (ECB), called for the “MiCA II” bill which possibly would be an addition to MiCA. The ECB president said in June that the bill should control the activities of crypto-asset staking and lending, which are undoubtedly rising.