The European Union lawmakers have voted 517-38 in favor of a new crypto licensing system, MiCA (Markets in Crypto Assets). The Union had 18 abstentions, marking it as the first major jurisdiction across nations to introduce a comprehensive crypto law. Describing the vote, European Commission’s Mairead McGuinness said it is a “world first” for crypto rules.
Lawmakers in a debate showed support toward plans to allow crypto wallet providers as well as exchanges to seek licenses for operation. Additionally, the support covered that issuers of stablecoins pegged to the value of other assets will be required to maintain sufficient reserves.
Alongside the vote in favour of MiCA, The European Parliament also voted in favor of a separate law known as the Transfer of Funds regulation, where the vote counted 529-29. The vote had 14 abstentions, and the law would require crypto operators to identify their customers to mitigate money laundering.
McGuiness further said that the move is proposed to protect consumers and safeguard financial stability and market integrity, adding that “the rules will start applying from next year.”
Stefan Berger, the European Parliament lawmaker who led negotiations on the law, commented that the rules put the EU “at the forefront of the token economy,” and have regulatory clarity compared to the U.S. In Berger’s opinion, “the sector that was damaged by the FTX collapse can regain trust.”
The vote was well received by the European Securities Markets Authority and is set to draft the timetable for secondary legislation under MiCA.
Reacting to the European Parliament’s vote for MiCA to be implemented, Binance CEO Changpeng Zhao, said that it means one of the world’s largest markets is introducing tailored regulations for crypto to protect users and support innovation.
He added that, overall, it is a “pragmatic” solution to the challenges collectively faced in the industry.
He expresses that crypto exchanges can now operate in the EU under clear rules. According to the CEO, Binance will be making adjustments over the next 12-18 months to be in a position of full compliance.
Ultimately, regulation may bring in some challenges, however, it can be a positive move for the crypto industry to achieve mainstream adoption. Regulation is embraced rather than an outright ban which would be a step backwards and prevent the full potential of cryptocurrencies from being realized.
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