Authorities in the EU are getting closer to a deal on a legislative package designed to regulate the crypto market and related activities in Europe comprehensively. According to reports in the media, an agreement on key legislation could be reached as soon as this month.
Bloomberg reported, citing knowledgeable sources, that representatives of relevant institutions in the European Union are nearing agreement on the Markets in Crypto Assets (MiCA) proposal, which aims to introduce union-wide rules for the crypto industry.
They chose anonymity to reveal that the French presidency of the EU Council and the European Parliament (EP) are now hopeful about resolving the issues that have slowed the draft’s progress. At two upcoming meetings, on June 14 and June 30, negotiators should do so.
According to sources familiar with the matter, the 27-member bloc’s member states and the Parliament continue to disagree on several aspects of MiCA. These include the potential inclusion of non-fungible tokens (NFTs) in the framework, as well as the supervision of crypto asset service providers (CASPs).
Officials are still discussing how to limit the use of stablecoins in payments. For example, there is an idea to introduce a ceiling for transactions that are not denominated in euros. It comes after last month’s collapse of the terrausd (UST) algorithmic stablecoin which affected crypto markets. Ensuring investor protection and gauging the impact of cryptocurrencies on financial stability are two other major considerations.
MiCA, which was first presented in 2020, was approved by the EP’s Committee on Economic and Monetary Affairs (ECON) in mid-March this year. The package entered the so-called trilogue stage of Europe’s legislative process later that month, during which the final draft must be coordinated between the European Parliament, the European Commission and the Council of the European Union.
A key element in the negotiations is also the need to address the environmental impact of crypto assets and some European lawmakers insist that the new legislation should take it into account. Provisions banning the energy-intensive proof-of-work mining sparked reactions from the Old Continent’s crypto community which complained they amounted to a bitcoin ban. The controversial texts were removed from the draft. France, which currently holds the EU presidency, is ready to accept a proposal by the Commission to disclose the energy consumption of CASPs.
EU members and the union’s legislature are also arguing about the inclusion of anti-money laundering provisions in the crypto legislation. National governments are pushing for a separate set of rules while the European lawmakers propose the establishment of a list of non-compliant CASPs.