EU Council approves legislation on crypto asset markets (MiCA)

The Council of the European Union has approved the proposed regulatory framework for the European crypto space. It is now up to European lawmakers to approve the crypto asset markets package before its final adoption.

Global crypto-currency regulation moves closer to adoption in the EU

The Committee of Permanent Representatives (COREPER) has approved the final version of the Regulation on Markets in Cryptographic Assets (MiCA), according to a document released by the Council of the European Union after a meeting on October 5. The committee is composed of the heads of mission of EU member states in Brussels.

COREPER prepares the agenda for ministerial meetings of the Council and is authorized to take certain procedural decisions. The European Parliament has been informed of the approval by correspondence to the Committee on Economic and Monetary Affairs (ECON) which is expected to meet and vote next week.

In a letter, the president of COREPER, Edita Hrda, confirmed that “if the European Union were to adopt its position at first reading… the Council, in accordance with Article 294(4) of the Treaty, would approve the position of the European Parliament and the act would be adopted in the wording that corresponds to the position of the European Parliament.“

The approval of the draft MiCA package in committee comes after the three main institutions in the EU’s complex legislative process – the Parliament, the Council and the Commission – reached consensus earlier this year on the text of the radical proposal to regulate the blockchain crypto economy. They also agreed on a set of anti-money laundering rules for transactions involving crypto-assets.

MiCA is expected to come into force after the approval process is completed and it is published in the Official Journal of the European Union, expected in late 2022. However, many of its provisions will become applicable in late 2023 or mid-2024.

The legislation aims to regulate the activities of crypto asset issuers and related service providers while protecting customers and investors across the Union. Previous attempts at revision in the Parliament, including a controversial proposal to ban the provision of services for crypto-currencies based on energy-intensive mining methods such as bitcoin, have sparked reactions in the industry and the Old World crypto community.

This week, members of the European Parliament called for the introduction of effective and uniform taxation rules for crypto-assets across member states. A non-binding resolution passed with the votes of a large majority of European lawmakers also suggested employing blockchain technology in the fight against tax evasion and offering small, casual crypto-currency traders simplified tax treatment.