Crypto rules get final approval to make Europe a global leader on regulation

The 27-nation EU’s broad cryptocurrency regulations were approved Tuesday, giving it a global lead in regulating the freewheeling sector.

The European Council approved the Markets in Crypto Assets (MiCA) guidelines in the last legislative phase. In April, European Parliament legislators approved the guidelines, which would take effect gradually in July 2024.

After FTX and TerraUSD collapsed, Europe tightened monitoring.

Stablecoins, which are less volatile than other cryptocurrencies and pegged to a physical currency or commodity like gold, will be included by the guidelines to improve transparency and combat money laundering.

Bitcoin is exempt, but other digital tokens and bitcoin-related services like trading platforms and digital wallets are.

“Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for money laundering and financing terrorism,” said Swedish Finance Minister Elisabeth Svantesson, whose country holds the rotating presidency of the European Council.

Crypto firms will need EU authorisation and be accountable for investor losses under MiCA, which has been under development since 2020. The government will list “noncompliant” firms.

The financial stability regulations prohibit market manipulation and insider trading. Crypto asset companies must disclose consumer risks, expenses, and levies.

Major crypto firms must disclose energy use. Bitcoin mining’s energy use has raised concerns about crypto’s carbon footprint.

The U.S. has done nothing to regulate cryptocurrencies and digital assets, while the U.K. is reviewing last year’s crypto rules.

Germany has fundamental crypto rules.