EU Parliament Approves Crypto Licensing, Funds Transfer Rules
The vote clears the way for landmark MiCA regulation to take effect in 2024.
Lawmakers in the European Union on Thursday voted 517-38 in favor of a new crypto licensing regime, Markets in Crypto-Assets (MiCA), with 18 absentions, making it the first major jurisdiction in the world to introduce a comprehensive crypto law.
The European Parliament also voted 529-29 in favor of a separate law known as the Transfer of Funds regulation, which requires crypto operators to identify their customers in a bid to halt money laundering, with 14 abstentions.
The vote follows a Wednesday debate in which lawmakers largely supported plans to make crypto wallet providers and exchanges seek a license to operate across the bloc, and require issuers of stablecoins tied to the value of other assets to maintain sufficient reserves.
In a tweet, the European Commission's Mairead McGuinness described the vote as a "world first" for crypto rules.
"We’re protecting consumers and safeguarding financial stability and market integrity," McGuinness said. "The rules will start applying from next year."
In a statement released by the European Parliament, Stefan Berger, the lawmaker who led negotiations on the law, said the rules put the EU "at the forefront of the token economy."
"The European crypto-asset industry has regulatory clarity that does not exist in countries like the U.S.," Berger said. "The sector that was damaged by the FTX collapse can regain trust."
The European Securities and Markets Authority also welcomed the vote in a tweet, and said it will "announce in due time" its timetable for drafting secondary legislation under MiCA. "ESMA still warns consumers that investing in cryptoassets is a risky endeavour with limited safeguards at this stage," the EU agency added.
The Markets in Crypto Assets regulation was first proposed by the European Commission in 2020, and to pass into law has to be approved by the parliament and the EU’s Council, which represents the bloc’s member states. Its main provisions start to apply just over 12 months after publication in the EU’s official journal, likely in June.
Update (April 20, 11:00 UTC): Adds tweet by Commissioner McGuinness.
Update (April 20, 11:23 UTC): Adds quote from Stefan Berger.
Update (April 20, 13:06 UTC): Adds quote from ESMA.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.