On
Monday evening, the Economic and Monetary Affairs Committee adopted,
with 31 votes to 4 and 23 abstentions, its negotiating position on new
rules on crypto-assets. They aim to boost users’ confidence and support
the development of digital services and alternative payment instruments.
Key provisions agreed by MEPs for those
issuing and trading crypto-assets (including asset-referenced tokens
and e-money tokens) cover transparency, disclosure, authorisation and
supervision of transactions. Consumers would be better informed about
risks, costs and charges. In addition, the legal framework supports
market integrity and financial stability by regulating public offers of
crypto-assets. Finally, the agreed text includes measures against market
manipulation and to prevent money laundering, terrorist financing and
other criminal activities.
Environmental threats
To reduce the high carbon footprint of
crypto-currencies, particularly of the mechanisms used to validate
transactions, MEPs ask the Commission to present MEPs with a legislative
proposal to include in the EU taxonomy (a classification system) for sustainable activities any crypto-asset mining activities that contribute substantially to climate change, by 1 January 2025.
MEPs stress that other industries (e.g.
the video games and entertainment industry, data centres) also consume
energy resources that are not climate-friendly. They call for the
Commission to work on legislation addressing these issues across
different sectors.
Supervision
MEPs want the European Securities and Markets Authority (ESMA) to supervise the issuance of asset-referenced tokens, whereas the European Banking Authority (EBA) will be in charge of supervising electronic money tokens.
Quote
Stefan Berger
(EPP, DE), the lead MEP, said: "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."
Next steps
A decision to enter into negotiations with EU governments on the final shape of the bill was adopted with 33 votes to 25.
Background
Crypto-assets, including
cryptocurrencies, are neither issued nor guaranteed by a central bank or
a public authority. They are currently out of the scope of EU
legislation. This creates risks for consumer protection and financial
stability, and could lead to market manipulation and financial crime.
The draft legislation differentiates between crypto assets in general,
asset referenced tokens (ARTs), also called “stable coins”, and e-money
tokens primarily used for payments.
Mechanisms used to validate transactions
in crypto-assets have a substantial environmental impact, particularly
for proof-of-work mechanisms, requiring a lot of energy and resulting in
a high carbon footprint and generating electronic waste. According to
most estimates, the energy consumption of Bitcoin equals that of entire
small countries.