PanamaTimes

Wednesday, Oct 09, 2024

Crypto rules to make Europe a global leader as prices plunge

Crypto rules to make Europe a global leader as prices plunge

Europe has moved to lead the world in regulating the freewheeling cryptocurrency industry at a time when prices have plunged, wiping out fortunes, fueling skepticism and sparking calls for tighter scrutiny.
European Union negotiators hammered out the final details for a provisional agreement late Thursday on a sweeping package of crypto regulations for the bloc’s 27 nations, known as Markets in Crypto Assets, or MiCA.

“In the Wild West of the crypto-world, MiCA will be a global standard setter,” the lead EU lawmaker negotiating the rules, Stefan Berger, said in a news release. The EU’s crypto rules “will ensure a harmonized market, provide legal certainty for crypto-asset issuers, guarantee a level playing field for service providers and ensure high standards for consumer protection.”

Like the EU’s trendsetting data privacy policy, which became the de facto global standard, and its recent landmark law targeting harmful content on digital platforms, the crypto regulations are expected to be highly influential worldwide.

The EU rules are “really the first comprehensive piece of crypto regulation in the world,” said Patrick Hansen, crypto venture adviser at Presight Capital, a venture capital fund.

“I think there will be a lot of jurisdictions that will look closely into how the EU has dealt with it since the EU is first here,” Hansen said.

He expected authorities in other places, especially smaller countries that don’t have the resources to draw up their own rules from scratch, to adopt ones similar to the EU’s, though “they might change a few details.”

Under the Markets in Crypto Assets regulations, exchanges, brokers and other crypto companies face strict rules aimed at protecting consumers.

Companies issuing or trading crypto assets such as stablecoins — which are usually tied to the dollar or a commodity like gold that make them less volatile than normal cryptocurrencies — face tough transparency requirements requiring them to provide detailed information on the risks, costs and charges that consumers face.

The rules will help novice crypto investors avoid falling victim to frauds and scams that regulators have warned are widespread in the industry.

“That’s a huge benefit in this space, especially for someone who has absolutely no idea where to go to or who to seek out or where to put my money into,” said Jackson Mueller, director of policy and government affairs at Securrency, a blockchain infrastructure company.

Providers of bitcoin-related services would fall under the regulations, but not bitcoin itself, the world’s most popular cryptocurrency that has lost more than 70% of its value from its November peak.

To address concerns about the carbon footprint left by bitcoin mining, which guzzles massive amounts of electricity for “proof of work” computer processing to record and secure transactions, crypto companies will have to disclose their energy use and prominently display information online about their environmental and climate impact.

Negotiators exempted NFTs, or non-fungible tokens, which have boomed over the past year. The EU said that unlike cryptocurrencies, the digital assets, which can represent artwork, sports memorabilia or anything else that can be digitized, are unique and sold at a fixed price. But it left room to reclassify them later as a crypto asset under MiCA or as a financial instrument.

The European rules are aimed at maintaining financial stability — a growing concern for regulators amid a string of recent crypto-related crashes. For example, the stablecoin TerraUSD imploded last month, erasing an estimated $40 billion in investor funds with little or no accountability.

The meltdowns have spurred calls for regulation, with other major jurisdictions still drawing up their strategies. In the U.S., President Joe Biden issued an executive order in March on government oversight of cryptocurrency, including studying the impact on financial stability and national security.

Last month, California became the first state to formally begin examining how to broadly adapt to cryptocurrency, with plans to work with the federal government on crafting regulations.

The U.K. also has unveiled plans to regulate some cryptocurrencies.

A few European countries, like Germany, already have basic crypto regulations. One of the EU’s goals is bringing rules in line across the bloc, so that a crypto company licensed in one country would be able to offer services in other member states.

The EU rules, which would still need final approval and are expected to take effect by 2024, include measures to prevent market manipulation, money laundering, terrorist financing and other criminal activities.

The EU also provisionally agreed Wednesday on new rules subjecting cryptocurrency transfers to the same money-laundering rules as traditional banking transfers.

When a crypto asset changes hands, information on both the source and the beneficiary would have to be stored on both sides of the transfer, according to the new rules. Crypto companies would have to hand this information over to authorities investigating criminal activity such as money laundering or terrorist financing.

The EU institutions are working out the technical details before the crypto tracing rules receive final approval.
Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
The Impact of Online Culture on Young Women: Survey Insights
Hypersonic Jet to Revolutionize Air Travel
Facilitated Communication: Miracle Tool or Manipulative Method?
US Election 2024: A Deadlock Between Trump and Harris
Dominica Sells Citizenship to Boost Climate Resilience
Elon Musk's X Faces Fines and Account Error in Brazil
Scott Jennings leaves CNN panel speechless as he tears apart Tim Walz's flimsy excuse of being "too dumb to tell the truth."
Earth Faces Severe Geomagnetic Storm from Solar Flare
China-Led Bloc Challenges The Quad in Indo-Pacific Region
Biden-Harris sent forklifts to open the border when Texas built a razor wall.
Storm Helene Devastates Eastern and Midwestern US, Claims 44 Lives
Trump Taps Elon Musk to Lead Federal Spending Cuts, Promising Trillions in Savings
Importing voters: With an election looming, the U.S. is approving citizenship applications at the fastest speed in years.
Hurricane Helene Set to Slam Florida with 'Unsurvivable' Conditions
El Salvadoran President Bukele at the UN: "Some complain that we put thousands in prison. In reality, we set millions free."
Google Commits 120 Million Dollars for Global AI Education: Sundar Pichai
Tennessee Woman Sentenced for Attempted Murder-For-Hire
Amazon Rainforest Suffers Massive Deforestation
Earth's Planetary Boundaries Breached
Elon Musk’s X Circumvents Brazil’s Supreme Court Block
Brazilian Judge Accuses Elon Musk’s X of Circumventing Court-Ordered Ban
Venezuelan Opposition Leader Coerced into Recognizing Maduro's Victory
Brazil's Firefighters Battle Amazon Blazes and Arsonists
X Social Media Platform Ordered Offline Again in Brazil
Global Workdays Required to Afford iPhone 16
In his podcast, Joe Rogan rightly questioned, "YOU NEED A VACCINE PASSPORT FOR FOOD, BUT VOTER ID IS ‘RACIST'?!"
Trump Unveils New Cryptocurrency Venture Amidst Campaign
X Update Enables App to Bypass Brazil Ban, Say Internet Providers
Delta Airlines Sets Strict Wardrobe Guidelines for Flight Attendants
Norway Achieves Milestone in Electric Vehicle Adoption
Hezbollah Hit by Explosive Pagers in Lebanon
Ex-Soldier Describes Trump Assassination Suspect's Troubled Ukraine Stint
Ghislaine Maxwell's Sex-Trafficking Conviction Upheld by Appeals Court
El Salvador's Bold Move: President Bukele Declares End to External Debt Reliance, Thanks to Bitcoin
Murdoch Family Succession Battle Begins
TikTok Faces Potential Ban in the US Amid Free Speech Concerns
Secret Service Investigates Elon Musk's Controversial Social Media Post
Meta Bans Russian State Media Networks
Impact and Aftermath of 9/11 Attacks on the US and the World
Internet Surpasses TV as UK's Leading News Source
Significant Corruption Concerns in Covid Contracts
MORAES WILL NOT SILENCE ME: "I WAS BORN FREE, I WILL DIE FREE!"
BRAZIL’S SUPREME COURT MINISTER ORDERS EXPLANATION ON X BLOCKING
Porn streamer OnlyFans paid owner $630mn in dividends
Donald Trump will not face sentencing over his 'hush money' conviction before the US presidential election on November 5, after a Manhattan judge granted his request to delay the proceeding
Return of Brazilian Artworks to Bahia
France Pilots Mobile Phone Ban in Schools
WHO-Led Study Finds No Link Between Mobile Phones and Brain Cancer
Kamala Harris is in Detroit and has a new accent again
EU Rejects Maduro’s Election Win Claim in Venezuela
×