The European Union (EU) is moving forward with its draft official blockchain infrastructure policy and has successfully passed a vote on the program. The European Parliament voted 529 to 22 in favor of the Digital Decade policy program to help public services digitize their operations.
The policy will also support a “Pan-European blockchain-based infrastructure“. According to the policy brief, the EU will embark on a large-scale program involving many countries to invest in web3 and blockchain solutions. Other parts of the plan include improving high-performance computing, fortifying data infrastructure and launching more 5G internet corridors.
The Crypto Asset Markets Regulation (MiCA) outlines several items, including new rules governing the classification and issuance of crypto-currencies. There will also be regulation of services related to crypto-currency markets. Overall, MiCA will bring regulatory clarity to the crypto-currency industry and could quickly become a model for other countries to follow.
Specifics of EU blockchain policy
The EU’s blockchain policy classifies crypto assets into three categories: electronic money tokens (EMTs), asset-referenced tokens (ARTs), and other crypto assets. EMTs are stablecoins, assets that have a stable value because they derive their value from fiat currency. ARTs are stablecoins that do not derive their value from fiat. An ART can be attached to any right, value, asset or combination. This can include more than one currency.
The third category covers all assets that are neither EMTs nor ARTs. However, the Other Crypto Assets category does not include other types of stable currencies such as algorithmic assets, as they do not meet the requirements set.
MiCA also describes eight crypto-currency services, including custody and administration, trading platform operations, exchange of assets for funds, exchange of assets for other assets, and order execution – which cover brokerage and intermediary services that help trade on behalf of others. Other services include placing crypto assets (marketing), receiving and transmitting orders on behalf of others, providing transfer services from one DLT address to another, and crypto consulting and portfolio management.
MiCA in the making
MiCA was introduced in September 2020 by the European Commission. The initial proposal already contained requirements that crypto-currency issuers publish white papers with detailed information about their projects. It also specified that stablecoin issuers must meet specific conditions, including limiting the number of tokens to be issued if the stablecoins are not euros or EU currencies.
Wieder einen Schritt weiter…Das Ergebnis der Trilog-Verhandlung zu #MiCA wurde vom ECON-Ausschuss angenommen. Gute Nachrichten 👍🏼 https://t.co/z73pkZMYvO
– Stefan Berger (@DrStefanBerger) October 10, 2022
In a recent tweeta member of the European Parliament’s Committee on Economic and Monetary Affairs (ECON), Dr. Stefan Berger, announced the approval of the bill. However, implementation may not take place until 2024. The bill is not expected to be passed until several processes, including legal review, are completed. According to an Oct. 5 MiCA release, “It is important to ensure that the Union’s financial services legislation is fit for the digital age and contributes to a future-ready economy that works for people, including by enabling the use of innovative technologies.“
In addition to regulating the use of crypto-currencies, MiCA also contains specifics for crypto-currency mining. The bill will require miners to disclose their energy consumption in order to properly measure the amount of energy that mining activities require.