EU plans to regulate cryptocurrencies on a par with traditional financial assets

The European Commission proposed establishing a legal framework for cryptocurrencies, security tokens and stablecoins, mirroring the requirements applied to traditional financial instruments. The proposal is set out in the Regulation on Markets in Crypto-Assets (MiCA), the draft version of which was published by Politico.

The document’s authenticity was confirmed by German politician and Member of the European Parliament Sven Giegold.

CLEAN COM Draft Regulation Markets in Crypto Assets by ForkLog on Scribd

The draft proposes treating crypto assets like any other financial instrument. According to the European Commission, this will provide legal clarity.

MiCA provides a broad definition of crypto assets and a basic set of requirements in line with FATF principles. It obliges service providers to register as a legal entity and calls for supervising issuers.

The draft divides stablecoins into two types: asset-backed and protocol-based. The first type is regulated more strictly due to concerns about manipulating financial systems.

The European Commission proposes conducting an assessment of the stablecoins’ white papers. Only after this will the issuer be allowed to distribute tokens. It may also levy a fee to cover regulators’ costs and ban paying interest to users.

Earlier this month, Germany, France, Italy, Spain and the Netherlands urged the European Commission to develop strict rules for stablecoins. In their view, this would protect consumers and maintain state sovereignty in monetary policy.

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