The European Council Closer to approving landmark crypto law. The proposed framework for regulating cryptocurrency in the European Union (EU). Has moved one step closer to ratification.
According to a statement posted on the European Council’s website, the European Council. Which sets the political agenda for the EU. Adopted its position on the Markets in Crypto Assets (MiCA) framework on Wednesday. Essentially, this means that conversations between the European Council and the European Parliament. Both can now take place before the proposal is officially accepted as legislation. As a result, this agreement served as the basis for the Council’s negotiating mandate. In the MiCA negotiations with the European Parliament.
In general, cryptocurrencies such as bitcoin are covered by the MiCA framework. Which also promises to make it easier for crypto businesses. To expand throughout the EU by allowing them to obtain a passportable license.
Aiming to address concerns raised by the announcement by Facebook that it intends. To issue a “basket-backed stablecoin,” or cryptocurrency pegged to the value of a combination. Of other assets or currencies, the MiCA has focused its attention. On regulating stablecoin issuers in particular. Known as “asset-referenced tokens,” this sort of stablecoin was specifically included. In the proposed MiCA framework. Which spent around a fifth of the package to detailing rules for issuers of these tokens.
It appears that the European Council’s own 405-page negotiation mandate for MiCA indicates. That the EU is not planning to relax its stance on issuers of asset-referenced tokens. Noting that they should “be subject to more strict standards than issuers of other cryptoassets.”
The negotiation mandate also included some MiCA exceptions
Additionally, a number of exclusions to the MiCA framework included in the negotiation mandate. For example, the Council has agreed that credit institutions approved under the EU’s capital requirements. Directive “should not required to obtain a second authorisation. Under [MiCA] in order to issue asset-referenced tokens,” according to the document. According to the proposal, these institutions should also be free from the capital limitations. That stablecoin issuers expected to maintain under the MiCA regulations.
Also stated in the Council’s statement is that non-fungible tokens (NFTs). Which include “digital art and collectibles, whose value attributed to each cryptoasset’s unique traits. And the service it provides to the token holder,” are exempt from the MiCA requirements.
Additionally, tokens “representing services or physical assets that are unique and not fungible,. Such as product guarantees or real estate,” according to the document. Are exempt from the laws.
Crypto assets that distributed for free or as a prize,. As well as transactions between global organizations such as the International Monetary Fund. And the Bank for International Settlements, are examples of potential exceptions.
As stated in the document, “It is appropriate to omit certain intragroup transactions. As well as certain public bodies from the scope of the regulation. Because they do not represent a danger.”
The European Commission, which serves as the EU’s executive branch, announced the implementation. Of the MiCA framework in September 2020. On Wednesday, the Council. Adopted its position on a second framework, the Digital Operational Resilience Act (DORA).Which would implemented alongside the Migration Control Act. Both frameworks are part of the Union’s bigger digital finance agenda. Including includes a number of other initiatives.