The European Union (EU) will take major strides in regulating the crypto industry when it finalizes two major crypto-focused regulations by the end of the month.
Crypto venture advisor Patrick Hansen said the regulations will have “huge implications for the crypto market in the EU and beyond.” The regulations in question are Markets in Crypto-Assets (MiCA) and Transfer of Funds Regulation (TFR).
MiCa is the comprehensive bill designed to regulate most of the crypto industry activities among EU states. The final meeting between the three main EU institutions on the bill will take place on June 30.
This meeting will see the EU Parliament, Council and Commission decide on the few topics that remain open.
EU discussions will extend to NFTs
According to Hansen, discussions will include whether non-fungible tokens should be within the scope of MiCA. Initially, the Commission wanted it to be while the Council and Parliament were against this, it appears the three bodies have now reached a compromise.
The likely compromise is that NFT issuers would be exempted. But the companies providing services for third-party NFTs will be within the scope of regulation. This means they will need a Crypto Asset Services Provider (CASP) license to operate.
And stablecoins, too
Additionally, there will be talks about stablecoins which have become a burning issue since the crash of Terra. Although the main aspects have been finalized, there are still a few open aspects.
These include the technical thresholds for major stablecoins and who would be responsible for supervising the stablecoins. The choice is between supervision by national bodies or through a uniform continental institution.
Meanwhile, decentralized finance (DeFi) will not fall under the scope of MiCA. The commission is planning to publish a report in 2023 and create a pilot project for DeFi supervision.
The meeting also will not be discussing a ban on Bitcoin mining but there will be strict disclosure requirements for crypto assets service providers on the environmental impact.
For the TFR, there are still several open topics and negotiations are expected to be contentious. So far, all crypto transactions will fall under TFR apart from peer-to-peer transfers.
But there are still issues such as verification of unhosted wallets, CASP requirement to report transfers above €1,000, AML blacklist, and more. It is unknown whether deliberations on TFR will end in June.
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