eu crypto regulation

EU Parliament Committee Votes Against Proof-of-Work Ban, Supports Alternative Amendment on Crypto Assets

14/03/2022 by Idelto Editor

European Parliament’s economic and monetary affairs committee has voted against banning proof-of-work-based assets for companies in the European Union. An alternative proposal on crypto assets by European Parliament member Stefan Berger receives support instead.

Committee Rejects Proof-of-Work Ban

The Committee on Economic and Monetary Affairs (ECON) voted on the proposed Markets in Crypto Assets (MiCA) framework Monday. The proposal includes a de-facto ban on proof-of-work, a last-minute addition to the bill.

According to Patrick Hansen, head of strategy at Unstoppable Finance, the committee has voted against the proposed proof-of-work (POW) ban. He explained in a series of tweets Monday:

The ECON committee of the EU Parliament just voted against the de-facto POW-ban … Big relief & political success for the bitcoin & crypto community in the EU.

Overall, 23 voted in favor of the POW ban amendment, 30 voted against, and six abstained, he added. As for the entire MiCA draft, Hansen clarified that the final votes were 31 for, 4 against, and 23 abstentions.

Unstoppable Finance tweeted: “We are relieved that the Parliament voted against the ban of proof-of-work-based assets for EU companies.”

Prior to the vote, lawyer Jake Chervinsky noted that MiCA’s POW ban looks like “a pretext for a bitcoin ban.” He warned: “Make no mistake: if they manage to ban POW, they’ll come for POS [proof-of-stake] next, & every other Sybil resistance mechanism after that.”

Alternative Amendment on Crypto Assets Supported

Hansen added that an alternative amendment from European Parliament member Stefan Berger received support instead.

The amendment reads: “By 1 January 2025, the Commission shall present to the European Parliament and to the Council, as appropriate, a legislative proposal to amend Regulation (EU) 2020/852, in accordance with Article 10 of that Regulation, with a view to including in the EU sustainable finance taxonomy any crypto asset mining activities that contribute substantially to climate change mitigation and adaptation.”

Berger tweeted after the POW-ban votes that this is a first-stage win for MiCA. He added that by accepting his proposal, EU parliament members have paved the way for future crypto regulation.

Regarding whether there are still any chances left for the proof-of-work ban, Hansen explained:

The groups that lost the vote have one last option. They could veto a fast-track procedure of MiCA through the trilogues & bring the discussion to the plenary of the Parliament. They need 1/10 of the votes of the EP to do so, which they have.

He noted: “Even outside of this MiCA regulation, the discussion around POW regulation is far from over.”

What do you think about the EU parliament committee voting against the proof-of-work ban? Let us know in the comments section below.

France Proposes EU-Wide Cryptocurrency Regulation

15/07/2021 by Idelto Editor

France has proposed giving more power to the Paris-based European Securities and Markets Authority (ESMA) and making it responsible for cryptocurrency oversight. French regulators say cryptocurrencies need EU-wide regulation.

EU-Wide Crypto Regulation With ESMA as Main Supervisor

France proposed Tuesday that the EU governments give the responsibility of regulating cryptocurrencies to the pan-European markets watchdog, the Paris-based European Securities and Markets Authority (ESMA), instead of national regulators, the Financial Times reported.

The French markets regulator, Autorité des Marchés Financiers (AMF), has also called for more regulatory power to be granted to the ESMA to regulate the crypto industry more effectively. The AMF said:

Granting ESMA the power of direct supervision of public offers of cryptoassets in the EU and of cryptoasset service providers would create obvious economies of scale for all national supervisors and concentrate expertise in an efficient way, for the common European benefit.

The AMF’s proposal was part of a wide-ranging package of reforms intended to strengthen financial regulation across Europe.

Under the AMF’s proposal, ESMA will also supervise clearinghouses, bourse operators, and non-financial data and ratings.

In addition, French authorities also want new supervisory tools to be given to ESMA, such as “no-action letters” used by U.S. regulators to provide guidance on interpreting financial rules. The French regulator added:

The EU should seriously consider a shift towards a truly centralized supervision of certain categories of entities and activities.

What do you think about France calling for EU-wide crypto regulation with more power to ESMA? Let us know in the comments section below.

EU to Launch Comprehensive Crypto Regulation by 2024: Report

20/09/2020 by Idelto Editor

The European Union is planning to implement comprehensive cryptocurrency regulation by 2024, two EU reports have reportedly revealed. This follows five European finance ministers calling on the European Commission to put in place “very strong and very clear rules” on cryptocurrency.

EU Crypto Regulation Coming Soon

A comprehensive cryptocurrency regulatory framework is expected to be put in place within four years, according to two EU documents, Reuters reported Friday, elaborating:

By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector.

“By 2024, the principle of passporting and a one-stop-shop licensing should apply in all areas which hold strong potential for digital finance,” the documents further state.

According to Euractiv, a pan-European publication specializing in EU policies, the European Commission will publish the Digital Finance Strategy together with its new rules on cryptocurrencies later this month. They outline the Commission’s priority actions by 2024.

In addition to the existing cryptocurrency proposal, European Commission Executive Vice-President in charge of Economy and Finance Valdis Dombrovskis said the Commission may also update “the prudential rules for crypto-assets held by financial firms, which could force banks with these digital assets to hold more capital as a cushion, given the volatility and risks associated with these assets,” Euractiv described.

The two documents note that the draft law will clarify how existing rules apply to cryptocurrencies and set out new rules where there are gaps, Reuters explained, adding that it “should also address the risks associated with these technologies.” The documents also detail that the Commission “wants to make it easier to share data within the financial sector to encourage competition and a wider range of services, while upholding the principle of ‘same risk, same rules, same regulation,’” the news outlet conveyed.

Moreover, the European Commission wants to increase the use of digital finance as 78% of payments in the eurozone are currently in cash, the publication noted, adding that the new rules should be in place within four years so new customers can start “using financial services quickly once anti-money laundering and identity checks have been completed.”

Last week, the finance ministers of France, Germany, Italy, the Netherlands, and Spain called on the European Commission to include “strong rules” in its upcoming cryptocurrency proposal, particularly for global digital tokens like Facebook’s Libra. In a joint statement, they said stablecoins should not be allowed to operate in the EU countries until legal, regulatory and oversight challenges had been addressed. “We’re waiting for the Commission to issue very strong and very clear rules to avoid the misuse of cryptocurrencies for terrorist activities or for money laundering,” French Finance Minister Bruno Le Maire was quoted as saying.

What do you think about the EU’s plans to regulate the crypto industry by 2024? Let us know in the comments section below.

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