The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has voted on a resolution to help facilitate Markets in Crypto Assets Regulation (MiCA) legislative package, which aims to coordinate the EU’s regulatory approach towards the adoption of cryptocurrencies.
After an earlier vote on Monday, the legislation does not include language about a proposed ban on proof-of-work mining, which was framed as a “de facto Bitcoin ban.”
Crypto-assets are defined as digital assets that may depend on cryptography and exist on a distributed ledger. A basic taxonomy distinguishes between payment tokens (means of exchange or payment)investment tokens (have profit rights attached) and utility tokens (enable access to a specific product or service).
The Commission is of the view that, where crypto-assets are not covered by EU financial regulation, the absence of applicable rules to services related to such assets leaves consumers and investors exposed to substantial risks. In addition, the fact that some Member States have put in place bespoke rules at national level for crypto-assets that fall outside current EU regulation, leads to regulatory fragmentation, which distorts competition in the Single Market, makes it more difficult for crypto-asset service providers to scale up their activities cross-border and gives rise to regulatory arbitrage. Lastly, the crypto asset subset of ‘stablecoins’ can raise additional challenges if it becomes widely adopted by consumers.
The initiative aims to support innovation and fair competition by creating a framework for the issuance, and provision of services related to crypto-assets. In addition, it aims to ensure a high level of consumer and investor protection and market integrity in the crypto-asset markets, as well as address financial stability and monetary policy risks that could arise from a wide use of crypto-assets and DLT-based solutions in financial markets.