In a 612-18 vote on Thursday, legislators from the European Union supported strict cybersecurity regulations for cryptocurrency service providers and other financial businesses.
The European Commission proposed the bill in 2020 due to concerns that banks were outsourcing data to a small number of large, unregulated cloud computing companies. However, it is still unclear what effect it will have on the crypto sector, which is rife with cyberattacks and other exploits.
The EU will foster innovation while keeping safety in mind by passing the Digital Operational Resilience Act (Dora). In a Wednesday night debate on the law, European Commissioner Mairead McGuinness stated that it is crucial to protect the financial system from cyberattacks and cyber fraud.
According to McGuinness, financial institutions will be required to test defences, monitor and report significant cyber incidents, and submit to supervisory oversight from the large tech companies providing such services.
An agreement reached in May between the European Parliament and the governments of EU is now official thanks to the vote. It applies to financial institutions like banks and payment companies as well as cryptocurrency businesses like wallet providers who will be governed by the EU’s Markets in Crypto Assets Regulation (MiCA). In fact, the two laws were initially proposed as a package.
French lawmaker Stéphanie Yon-Courtin said that “this is one more step towards Europe’s digital sovereignty. This will protect European investors on the one hand, but it will also prepare financial enterprises against cyber attacks on the other.”
That might be a big development for the crypto industry in the EU, which may have lost up to $3 billion in attacks this year globally, but some are worried it could compromise privacy.
Ivan Sini, the sole EU representative for Croatia’s Klju Hrvatske party, claimed that when cryptocurrencies first surfaced, people turned to them in the belief that they would be safe from government monitoring. He believed that if they regulate it now, they will have access to another “world” where they will be subject to biometric control. The concept of cryptocurrency is being undermined by these actions.