The EU Council Endorses Markets in Crypto Assets (MiCA) Regulation

The EU Council Endorses Markets in Crypto Assets (MiCA) Regulation

The EU Council, one of the legislative bodies of the European Union, has approved the proposed regulatory framework for European crypto assets. It is now up to European lawmakers to approve the Markets in Crypto Assets (MiCA) legislation before its final adoption.

Crypto Regulation Moves Ahead for Adoption in the EU

The Committee of Permanent Representatives (COREPER) has approved the final version of the Markets in Crypto Assets (MiCA) legislation, as per the document published by the Council of the European Union after a meeting on Oct. 5. The committee is made up of the Heads of Missions from the EU Member States in Brussels.

COREPER prepares the agenda for the ministerial meetings of the Council and is authorized to take decisions. The European Parliament has been informed about the endorsement. The Committee on Economic and Monetary Affairs (ECON), is expected to meet and vote next week.

In a letter, COREPER Chair Edita Hrda confirms that "should the European Union adopt its position at first reading... the Council would, per Article 294, paragraph 4 of the Treaty, approve the European Parliament’s position, and the act shall be adopted in the wording which corresponds to the European Parliament’s position."

The approval of the MiCA draft in committee follows the approval of three main institutions in the EU’s complex legislative process, the Parliament, Council, and Commission, that reached a consensus earlier this year on the text of the sweeping proposal to regulate the bloc’s crypto economy. They also agreed on a set of anti-money laundering rules for transactions involving crypto assets.

MiCA will be effective after the completion of the approval process and its publication in the European Union’s Official Journal, which is expected towards the end of 2022. However, many of its provisions will be applicable in late 2023 or by mid-2024.

The legislation will regulate the activities of issuers of crypto assets and providers of related services while protecting customers and investors across the Union. Previous attempts at revision in Parliament, including a contentious proposal to prohibit the provision of services for cryptocurrencies that rely on energy-intensive mining methods like Bitcoin, sparked outrage in the crypto industry and community.

This week, members of the European Parliament proposed implementing effective and uniform taxation rules for crypto assets across the EU. A non-binding resolution adopted with the votes of a large majority of European lawmakers also suggested employing blockchain technology in the fight against tax evasion and offering small and occasional crypto traders a simplified tax treatment.