EU Proposes Full Regulatory Framework for Cryptocurrencies

The European Union’s executive branch has laid out plans to create a comprehensive framework for digital assets.

• Confirming CoinDesk's report last week, the European Commission on Thursday proposed legislation that will turn cryptocurrencies into a regulated financial instrument.
• Dubbed the "Regulation on Markets in Crypto Assets" (MiCA), the bill will provide clarity on what constitutes a "crypto asset," as well as definitions for different token subcategories.
• It will provide rules on digital asset custody and capital requirements, while also stipulating what the relationship between the token issuer and the token holder will be, including laying out a procedure for investors to file complaints against projects.
• Officials also floated the idea of a regulatory sandbox initiative for companies developing infrastructure for the trading and settlement of digital assets.
• If passed, the MiCA would turn the EU into the largest and most significant regulated space for cryptocurrencies anywhere in the world.
• The framework will be applicable in all 27 member states, giving regulated crypto companies passporting rights across the entire bloc.
• Following on from concerns expressed last week by five European finance ministers, the commission has also warned that stablecoin issuers will likely be subject to more stringent regulatory checks.

See also: ‘Misleading’ Term Stablecoin Should Be Ditched, Says ECB