EU officials have agreed on a new set of rules for the cryptocurrency industry. The European Commission, EU lawmakers and member states could sign off on the new regulations, which come into effect in 2024.
The new rules are designed to stamp out money laundering in the crypto sphere and come at a difficult time for digital assets. Bitcoin is facing its worst quarter in more than a decade, but officials are hopeful that these new measures will help stabilize the market.
The European Union is cracking down on cryptocurrency trading with a new set of rules that will give regulators the power to ban or restrict crypto platforms that they deem to be unsafe for investors. The rules, which will be enforced by member states, are aimed at protecting investors and ensuring market integrity and financial stability. The European Securities and Markets Authority (ESMA) will also have the authority to intervene if necessary.
This crackdown comes as a growing number of people have been investing in cryptocurrencies like Bitcoin in recent years. While some have made a fortune from these investments, others have lost money after crypto exchanges were hacked or when prices suddenly plunged. Crypto mining is an energy-intensive process that creates new units of digital currency. While some have proposed scrapping crypto mining altogether, it was voted down by lawmakers in March.
NPR Reports, “Gov. Kathy Hochul is indicating she may wait to decide whether to sign into law a bill that would ban some types of crypto mining in the state for two years. The bill imposes a moratorium on new and renewed permits at fossil fuel-burning plants used to power computers that generate cryptocurrency by performing complex math. The process, known as proof-of-work, is very energy-intensive.”
Under the new rules, trading platforms will be required to warn consumers about the risks associated with digital token trading. In addition, regulators have agreed to measures that would reduce anonymity for certain crypto transactions.
The authorities are concerned about the potential for money laundering and other illegal activity associated with digital currencies. The new rules are intended to help protect consumers and reduce the chances for criminal activity.
When it comes to regulating digital assets, the European Union is leading the way. Its Mica policies are stricter than those of other countries, but many crypto industry insiders see this as a positive step. The rules are expected to come into force in 2024, making the EU the first major bloc to have tailored laws for the crypto market. This is a major development that puts the EU ahead of both the US and UK when it comes to regulating this growing sector.
Crypto companies like Coinbase will look to get licenses in various European countries including so they can offer their services in the 27 EU countries under MiCA.
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