The European Council has agreed on rules to regulate the crypto industry

The EU Council has completed the procedure for agreeing on new legislation on the regulation of the crypto market in the EU countries (MiCA) and the DAC8 amendment. The adoption of a single regulatory framework will make the European Union the first jurisdiction in the world to introduce a cryptocurrency licensing regime.

The legislation, approved by the finance ministers of the 27 EU countries, establishes clear regulatory principles and requirements for the use of cryptocurrencies and related services and activities in the European Union. The scope of the legislation extends to virtually all cryptocurrencies and stablecoins.

MiCA should in fact lead to total licensing of service providers. In addition, MiCA requires stablecoin issuers to hold sufficient collateral in physical assets. All companies engaged in services related to cryptocurrencies will have to fight money laundering and terrorist financing (AML) and implement know-your-customer (KYC) procedures without fail.

The DAC8 amendment requires Cryptocurrency Asset Service Providers (CASPs) to collect information on all transfers in cryptocurrencies (of any amount) to ensure traceability and identify suspicious transactions.

MiCA will enter into force one year after the official ratification by the European Council, which should take place in June this year. Amendment DAC8 will become effective after the change in the regulatory regime.

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