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European Parliament adopts MiCA report

European Parliament adopts MiCA report

This week the European Parliament has rejected a ban of proof-of-work cryptos (PoW), such as bitcoin. Instead, it has advanced the Markets in Crypto Assets bill (MiCA). The bill will regulate current out-of-scope crypto-assets and their service providers in the EU.

Cryptos like Ethereum and Bitcoin use PoW, the mechanism used to confirm transactions and add new blocks to the chain. Because the blockchain is becoming more complex, transactions require more and more energy. Because of this banning these cryptos has been a point of discussion in the European Parliament.

MiCA report

In a vote last Monday, the EU rejected the ban, but advanced with draft rules for MiCA. The bill includes measures for consumer protection. “Key provisions agreed on by the European Parliament for those issuing and trading crypto-assets cover transparency, disclosure, authorization and supervision of transactions”,  stated a press release from the European Parliament.

‘Key privisions agreed on cover transparency, disclosure, authorization and supervision of transactions.’

These measures would mean that consumers will be better informed about risks, costs and charges. Additionally, the framework will regulate public offers of crypto-assets. This will improve market integrity and financial stability.

EU taxonomy

Though PoW won’t be banned, the European Parliament did take the environmental threats into account. It wants to include any crypto-asset mining activities that contribute to climate change in the EU taxonomy for sustainable activities. This could help companies scale up to become more climate-friendly.

‘The European Parliament has paved the way for innovation-friendly crypto-regulation.’

“By adopting the MiCA report, the European Parliament has paved the way for an innovation-friendly crypto-regulation that can set standards worldwide. The regulation being created is pioneering in terms of innovation, consumer protection, legal certainty and the establishment of reliable supervisory structures in the field of crypto-assets. Many countries around the world will now take a close look at MiCA”, said Stefan Berger, member of the European Parliament.

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