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The European Council approves the MiCA, moving it closer to full implementation

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(Kitco News) - Representatives on the European Council voted to pass the European Union's Markets in Crypto-Assets (MiCA) regulation on Wednesday. The MiCA lays out a framework for how the region would approach regulating the cryptocurrency sector. 

Under the text of the legislation, the issuance of cryptocurrencies will be brought under the wing of institutional regulation, and it establishes a first-time regime for crypto-asset service providers across the EU’s member states.

In order for the proposal to proceed toward formal adoption, the European Parliament's economic affairs committee will also need to vote on the legislation on Oct. 10.  

Once that step is complete, the text will be translated into the EU’s more than 20 official languages, and the file will then be adopted into the EU’s Official Journal to formalize its enforcement.

There is a 12-18 month adaptation period included in the MiCA that will allow countries to prepare for the new law to be enacted, so the law is not expected to be fully implemented until the start of 2024, at the earliest. 

Further details on how to implement the rules for crypto-asset service providers will be worked out next year by the European supervisory bodies, once the MiCA has been adopted into the EU’s official journal. 

The basics of the MiCA were agreed upon by the European institution back in June, and the next three months were spent negotiating the technical details of the regulation. The main goal of the framework is to protect customers and fight crypto-related crimes like money laundering. 

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The biggest area of contention revolved around the limitations set on non-euro denominate stablecoins. A daily transaction cap for non-euro stablecoins was reinserted into the legislation on Sept. 28 by the French delegation who were worried for the euro’s sovereignty. The cap limits the amount of daily transactions using stablecoins denominated in other currencies, such as the US dollar, to €200 million transacted per day.

The draft text of the proposal also shows that officials are looking to require all issuers of cryptocurrencies to publish a whitepaper that details the technical specifications of the project along with a technical roadmap. 

Any information contained in the whitepaper or marketing communications “should be fair, clear, and not misleading,” the legislation states. “Advertising messages and marketing material should be consistent with the information provided in the crypto-asset white paper.”

The bill also outlines how crypto wallets and exchanges should be regulated and imposes reserve requirements for players interested in issuing stablecoins across the bloc.  

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