EU Ministers Approve World’s First Crypto Rules

European Union finance ministers on Tuesday approved the world’s first comprehensive regulations for crypto assets, piling pressure on the UK, the US and other regions to follow suit.

The EU Council, representing its 27 member states, unanimously approved the Markets in Crypto Assets (MiCA) regulation, as well as new anti-money laundering measures for crypto funds transfers.

“I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector,” said Sweden finance minister Elisabeth Svantesson, who chaired the talks.

Svantesson alluded to several major failures in the digital assets space in recent months – notably the collapse of major crypto exchange FTX amidst criminal fraud charges – which have increased pressure on governments to impose controls on the largely unregulated crypto sector.

‘Urgent need’

“Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” she said.

MiCA requires crypto firms including wallet providers and exchanges to obtain a licence to operate in the bloc, while stablecoin issuers are required to hold suitable rserves.

The regulation’s main features were politically agreed last June, while the European Parliament approved the measures in April.

The provisions are due to take effect just over a year after they are published in the EU’s official journal, which is now likely in June or July.

Money-laundering rules

Ministers separately approved new measures called DAC8 forcing crypto providers to disclose details of their customers’ holdings to tax authorities to increase transparency.

“Updating our tax rules to address these issues will help national administrations to collect tax more efficiently and keep up with evolving technology as Europe moves forward with its digital transition,” said European Commission economy vice president Valdis Dombrovskis.

In April the UK Treasury said laws to regulate the cryptocurrency industry are set to arrive in the next 12 months, after the UK government said in February it planned to regulate crypto assets.

The US has focused on carrying out enforcement actions under existing securities regulations while it mulls whether to introduce new rules for the sector and who would apply them.