European Union officials agreed to the Markets in Crypto-Assets (MiCA) law on Thursday, placing cryptocurrencies, issuers and service providers under the EU’s first regulatory framework for the industry. The rules are expected to kick in as early as 2024.
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- All stablecoins will fall under the supervision of the European Banking Authority (EBA) and issuers must be located in the EU.
- Stablecoin issuers are to maintain a sufficient liquidity reserve to provide holders with commission-free redemptions, according to the EU’s landmark law.
- Stablecoins have been at the center of attention for global regulators since the Terra-UST depegging incident wiped out billions of dollars in savings and investments.
- Crypto service providers will be required to identify and report transactions above 1,000 euros (US$1,045) involving personal cryptocurrency wallets.
- MiCA also will require crypto firms to disclose information on their environmental and climate footprint.
- The European Commission will need to assess and create a regulatory regime for non-fungible tokens (NFTs) in 18 months, as they were excluded from the scope of MiCA.
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