EU Seals Text of Landmark Crypto Law MiCA, Fund Transfer Rules

[zasad@]

https://www.coindesk.com/policy/2022/10/05/eu-seals-text-of-landmark-crypto-law-mica-fund-transfer-rules/

"The European Union (EU) has agreed upon the full legal text of its landmark legislation known as the Markets in Crypto Assets Regulation (MiCA), alongside a further law to reveal the identity of those making crypto payments.
At a Wednesday meeting, diplomats representing the bloc's member governments in the EU's Council signed off on the text of laws which were the subject of political deals struck in June, apparently without further discussion, a source briefed on the talks told CoinDesk.
MiCA introduces the first-ever licensing regime for crypto wallets and exchanges to operate across the bloc and imposes reserve requirements on stablecoins that are intended to avoid Terra-style collapses. A separate law on funds transfers requires wallet providers to check their customer's identity, in a bid to cut money laundering.
The text must also be formally agreed to by lawmakers at the European Parliament and is expected to be published in the EU's official journal in the early part of next year before taking effect in 2024."

[1714681904]

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[Hydrogen]

The text must also be formally agreed to by lawmakers at the European Parliament and is expected to be published in the EU's official journal in the early part of next year before taking effect in 2024."

It is possible EU lawmakers are hesitant to legislate laws which might encourage whale investors to migrate abroad and increase capital flight.

I wonder if the UK will participate in the widespread adoption of these crypto regulatory measures. The UK seems to have insulated itself from much of recent EU activity through #brexit.

Is it possible that the UK will become the crypto friendly european nation, while the EU itself will take a harsher and more restrictive stance.

[Poker Player]

Is it possible that the UK will become the crypto friendly european nation, while the EU itself will take a harsher and more restrictive stance.

I don't know what the UK will do, what I do know for sure is that the EU is going to screw the business with regulations and taxes. I can assure you that the leading cryptocurrency related startups that will be created in the next few years will not be created in the EU. Or in the unlikely event that they are created in the EU they are going to move somewhere else soon. As easy as it is to offshore a digital business, no one in their right mind is going to stay in Bolshevik land to have their business screwed up.

" A separate law on funds transfers requires wallet providers to check their customer's identity, in a bid to cut money laundering."

This was already much talked about at the time. Basically they want KYC for all transactions, of any amount. And the bad thing is that in the EU this is likely to prosper, with hardly any opposition.

[fillippone]

The text must also be formally agreed to by lawmakers at the European Parliament and is expected to be published in the EU's official journal in the early part of next year before taking effect in 2024."

Goof luck with that.
EU is such a shitshow when it comes to law approval. Text going back and forth many times between the institutions, until a perfect form is achieved when the object is no longer useful.

In this case, the vain tentative regulation of bitcoin. Poor lads.

[Lucius]

There is no doubt that there is a very strong lobby within the EU to put cryptocurrencies under supervision, and this is not surprising considering the position of the ECB and their leader Lagarde. I am not really surprised by such a policy at all, because this is not only about the general incompetence shown by EU bureaucrats, but also about the fear that cryptocurrencies will become a serious threat to the euro.

For those who are not from the EU and think that everything here works like a Swiss watch, I can only say that the situation is far from that and that I agree with @fillippone when he talks about approving laws, especially at the national level. The European Parliament can vote whatever it wants, but each country can refuse to adopt any law within its borders - because there are still EU members for whom AMLD5 is not yet something they have adjust their laws with.

It will be good if this law becomes fully functional by the end of the decade, because right now we are busy cutting down trees and digging coal - but don't worry too much, we will paint everything green so that our consciences will be clear.

[stompix]

For those who are not from the EU and think that everything here works like a Swiss watch, I can only say that the situation is far from that and that I agree with @fillippone when he talks about approving laws, especially at the national level. The European Parliament can vote whatever it wants, but each country can refuse to adopt any law within its borders - because there are still EU members for whom AMLD5 is not yet something they have adjust their laws with.

MiCA is a regulation, and once adopted it is going to be implemented as it is in every country, what you think of are directives that are not mandatory, those can be delayed, can be exempt from, but voted regulations are final, that's why every country has a veto right against one in the council prior to the parliament vote.
AMLDV is a directive, basically it just sets a legal framework in place on which each country can make its own decisions on how to implement it in order to reach a common goal between states.

One thing I find a bit interesting is that stable token issuers are screwed, from a ton of other things this one is really nice:

To prevent the risk of loss for asset-referenced tokens and to preserve the value of those assets issuers of asset-referenced tokens should have an adequate custody policy for reserve assets. That policy should ensure that the reserve assets are entirely segregated from the issuer’s own assets at all times, that the reserve assets are not encumbered or pledged as collateral, and that the issuer of asset-referenced tokens has prompt access to those reserve assets. The reserve assets should, depending on their nature, be kept in custody either by a credit institution authorised under Directive No 2013/36/EU, an investment firm authorised under Directive 2014/65/EU or by a crypto-asset service provider.

So bye-bye tether/Busd style "reserves".

[fillippone]

MiCA is a regulation, and once adopted it is going to be implemented as it is in every country, what you think of are directives that are not mandatory, those can be delayed, can be exempt from, but voted regulations are final, that's why every country has a veto right against one in the council prior to the parliament vote.

You are correct here.
I thought it was a directive too.
This regulation should be approved on Monday. Very likely the Parliament will approve the regulation without any amendment, that would send it back to modification stage.
Once the European Parliament approves, the regulation is law in the EU member states, without the need of other actions from the member states parliaments.

[stompix]

Seems that at least a few businesses from the crypto space are cheering this and probably some of them are just agreeing in silence as they know doing in public will attract hate from their older generation customers, and no surprise chainalysis is from the first mentioned.
Just got a notification from their weekly beefing and, the title really surprised me:

EU regulations and a big day for law enforcement

For the first few moments I thought wow, some major bust happened, who did they arrest, as they've said "law enforcement" not lawmakers or anything like that, but not surprisingly, everything

MiCA, together with TFR, will provide a harmonised crypto regulatory framework across the EU, obviating the need for businesses to navigate a myriad of rules. These rules signal a more comprehensive regulatory regime, transitioning from merely countering illicit finance to prudential, conduct of businesses, prevention of market abuse and consumer protection. As the draft regulatory technical standards and guidelines develop, the rules will provide additional legal clarity and certainty to crypto asset service providers, crypto assets offerors, and stablecoin issuers intending to operate in the EU, and offer a benchmark for other policymakers across the globe. will be just heaven on earth from now on:

I think chainalysis smelled a few bens to chew as their services might get more useful or even mandatory so no wonder this ...is good for crypto!  

With the clarity this regulatory regime provides, the cryptocurrency industry can confidently pursue its goals of building innovative financial tools, while ensuring the necessary safeguards are in place for sustainable long-term growth.

Feels like reading some political manifesto from the interwar period.