European Parliament approves new regulation ‘MiCA’ for consumer protection for digital assets


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On March 14, this
year, proposed European Union
Regulation known as Markets in
Crypto Assets Regulation, or MiCA,
was put for vote, in the European Union Parliament’s Committee on Economic and
Monetary Affairs. The European Parliament has approved draft regulations for
national regulators to regulate crypto assets, protect consumers, and promote
environmental sustainability.
Proposed amendments
banning or restricting proof-of-work crypto assets, which would also include
effectively ban on Bitcoin (BTC), were rejected. In addition to boosting
investor confidence in currencies, the EU's Parliament said MICA will help
develop digital services and alternative payment instruments. Legislators
approved the rules by a vote of 31 to 4, with 23 abstentions. The main provisions
of the MiCA Regulation pursue four objectives: legal certainty, support for
innovation, consumer and investor protection, market integrity, and
financial stability.
The proposed
regulation is part of the digital finance package which also includes a
proposal for a pilot scheme for market infrastructures based on distributed
ledger technology (DLT) of interest to the security token sector. This was
adopted by the Parliament’s Economic and Monetary Affairs Committee in January
this year and is due to come into force by the end of 2022.
Through many
ways, EU Commission has been trying to regulate the crypto-asset sector. Finally
found the option of full harmonization within the EU of the rules applicable to
issuers and service providers in crypto assets. A tailor-made legislative
regime combined with regulation under the E-Money Directive is the step that the
Commission is planning to do for stablecoins.
Although it remains unclear how crypto assets will be evaluated from an environmental regulatory perspective. However, the euro-parliamentarian in charge of the text indicates that cryptos will fall under the taxonomy of the union (the process of classifying economic activity that has a positive impact on the environment), without specifying how to treat them considering this taxonomy.

Indrani bose
CBW - External Analyst
INDIA