The European Commission proposed on Thursday to establish a complete regulatory framework for cryptocurrencies.
According to the official announcement of the European Union, it has proposed legislation to transform cryptocurrency into a regulated financial instrument. This bill, called “Encrypted Asset Market Regulation (MiCA)”, will clearly define what is “encrypted asset” and the definition of different token subcategories.
The EU stated, “Today’s digital finance package will enhance Europe’s competitiveness and innovation capabilities in the financial sector, paving the way for Europe to become a global standard setter. It will provide consumers with more choices in financial services and modern payments. And opportunities, while ensuring consumer protection and financial stability.”
The digital finance package includes digital financial strategies, retail payment strategies, legislative proposals for the EU’s encrypted asset regulatory framework, and recommendations for the EU’s flexible regulatory framework for digital operations.
The new bill will provide regulations on digital asset custody and capital requirements. It will also stipulate the relationship between token issuers and token holders, including procedures for investors to file complaints about the project. EU officials also proposed a regulatory sandbox initiative aimed at helping companies that develop infrastructure for the trading and settlement of digital assets.
If passed, MiCA will make the European Union the largest and most important cryptocurrency regulator in the world. The framework will apply to all 27 member states, enabling regulated crypto companies to obtain corresponding rights in EU countries.
