Mairead McGuinness, the European Union's (EU) financial services chief, has urged the rest of the world to follow the EU's new comprehensive set of rules for crypto assets, Reuters reports.
The EU's Markets in Cryptoassets Regulation (MiCA) is set to be the world's first set of rules for the previously unregulated cryptocurrency sector once approved on Thursday, April 20.
EU member states and the European Parliament have already approved the regulation.
Preventing Another FTX-Like Crypto Scandal
The crypto industry has been rocked by the failure of crypto exchange FTX and other failures, which have caused benchmark bitcoin prices to plummet.
The EU's MiCA regulation requires crypto firms to be authorized by the EU to serve customers in the bloc and to adhere to anti-money laundering and terrorism financing safeguards.
Reuters tells us that MiCA will be phased in at the beginning of July 2024 to allow the sector time to adapt. Crypto firms licensed in one EU member state could offer their services in all 27 countries.
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Additionally, the regulation identifies and covers three types of crypto assets: asset-referenced tokens (ART), electronic money tokens (EMT), and other crypto assets not protected by existing EU law.
European lawmakers are heralding the new regulations as the end of the "Wild West era" of crypto assets - an apt metaphor for the state of crypto asset security in the last few years.
Cities throughout the EU, including Paris, are already courting firms in the sector. However, McGuinness emphasizes that other countries must follow suit by enacting strong and robust crypto regulations, as global convergence is critical.
More Countries Heeding the Call
No equivalent laws exist in the United Kingdom, though UK lawmakers recently published draft regulations for crypto assets.
The UK Financial Conduct Authority (FCA) currently monitors crypto asset firms to ensure that they have adequate anti-money laundering (AML) and terrorist financing procedures in place, but crypto assets themselves are not regulated.
More About MiCA
McGuinness stated that the commission would investigate whether additional rules for decentralized finance, as well as lending and borrowing in crypto assets, are required.
The EU's MiCA regulation is intended to improve consumer and investor protection while encouraging innovation and crypto asset use.
The regulation identifies and regulates the issuance and trading of crypto assets and the management of the underlying assets, where applicable, by providing legal certainty for crypto assets not covered by existing EU legislation, with additional regulatory rules aimed at significant ART and EMT.
McGuinness believes that if FTX had been brought under the jurisdiction of the EU, many of its practices would have been prohibited under MiCA.
More News on Crypto
In the most recent development of the FTX bankruptcy case, the renowned cryptocurrency company has regained $7.3 billion in lost funds, signaling a new beginning.
The company's lawyer also asserted that the company's stakeholders are discussing whether to relaunch the company and will confirm this decision by the end of the next quarter.
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