The European Commission, EU lawmakers, and member states secured an agreement on the first major comprehensive regulation for digital assets Markets in Crypto-Assets (MiCA), CNBC reports. Stefan Berger, a lawmaker of the European Parliament, said that the document would “put order in the Wild West of crypto assets.” The document came out after three main EU institutions finalized measures against money laundering in the crypto market. Under the new rules, the crypto industry may survive the most brutal quarter in 10 years. The MiCA law is designed to take control of the crypto market, economists highlight. At the same time, stablecoins like Tether and USDC Circle should maintain reserves to meet redemption requests in the event of mass sell-offs. Other large stablecoins will be limited to €200 million in transactions per day. The European Securities and Markets Authority, or ESMA, is in charge of banning or putting restrictions on crypto platforms if they are dodging the legislation or threatening market integrity or financial stability. “Today, we put order in the Wild West of crypto assets and set clear rules for a harmonized market that will provide legal certainty for crypto asset issuers, guarantee equal rights for service providers and ensure high standards for consumers and investors,” Stefan Berger stressed. Notably, the new legislation covers environmental issues surrounding the crypto industry. MiCA forces firms to disclose their energy consumption as well as the impact of their operation on the environment because crypto mining is the energy-intensive process of minting new units of bitcoin and other tokens. In addition, crypto trading platforms are expected to warn consumers about the risk of losses associated with digital asset trading. Meanwhile, MiCA whitelists NFTs, which represent ownership of digital properties like art. One of the main points of the law is to reduce anonymity when it comes to certain crypto transactions. The EU government is deeply concerned about using crypto-assets for money laundering. The new rules follow the collapse of TerraUSD, the algorithmic stablecoin pegged to the US dollar. Experts note that the crash blew away millions of US dollars from the crypto market. Robert Kopitsch, secretary general of crypto lobbying group Blockchain for Europe, said that “the EU is not happy about stablecoins generally.” The EU policymakers doubt the use of such tokens backed by existing assets, such as the US dollar. The authorities fear private digital tokens as they threaten sovereign currencies like the euro. Against this background, MiCA represents one of the most advanced initiatives to date. “MiCA is focused on driving crypto innovation and adoption in the European region,” Paolo Ardoino, chief technology officer of Tether, said. Many analysts flagged that Europe was lacking huge crypto companies to tackle existing problems.
