The EU – new cryptocurrency regulations are to serve consumers worldwide. It relates to how a cryptocurrency expert/dealer should connect with clients, reflecting the EU’s concern in the crypto world.
The new comprehensive cryptocurrency ensures harmonized market: even though millions of people participate in crypto trading and accumulation of crypto asset daily, the EU crypto rules shows to create harmonized bonds via the new regulations.
It provides legal ownership and certainty for issuers, just like the physical world. Since crypto is worth a lot in the real world, having a sense of certainty about your crypto assets is not bad.
Lastly, it shows an outstanding security standard for consumer protection – while consumers are the last in the queue, the rules back them up with satisfactory regulations. Here are the comprehensive cryptocurrency regulations:
Markets in Crypto Assets, or MiCA new rules
MiCA will safeguard consumers against dangers related to the interest in crypto resources and keep them from fake transactions. The MiCA approach to safeguard consumers put brokers and other crypto organizations in tight legal conditions.
Consumers are submissive to risks in every transaction: the regulations enforce brokers and crypto companies to lecture consumers on the risks associated with any crypto transactions. It consumes time and reduces crypto transactions between clients and their providers.
The rules show to safeguard consumers from the risk they are well aware of before and after any crypto transaction. MiCA aims that “if at all a consumer loses money, it will not be sudden news or from a fake or scam transaction.” MiCA focuses on educating consumers on the actions associated with cryptocurrency: consumers should know the costs and charges before they engage in any transactions.
Jackson Mueller, director of policy and government affairs at Securrency, also contributed; “he said MiCA regulates fraud and assists novices in the crypto world: especially those who do not know what to buy and how to put money in the crypto market.”
Showcase the effect of cryptocurrency on the environment and financial body
Cryptocurrency affects energy consumption and climate one way or the other. Bitcoin mining and other online crypto activities consume huge loads of electricity energy—the new comprehensive cryptocurrency claims that companies should show proof of work and transparency. Crypto companies must disclose their impact on energy consumption and online information: how they generally affect the climate and environment.
Under MiCA, the digital assets (like NFT) represent sports, memorabilia, artwork, or others. They are digitally recognized, can be sold, and are considered unique digital assets. However, they are not classified as crypto assets or financial instruments.
Financial stability is another important case study overseen by the European rules: the European rules analyze cryptocurrency’s major effect on financial stability. Cryptocurrency suffers from sudden crashes jeopardizing the financial stability of a state. Among the rules is the specific concern about allocating bodies that oversee cryptocurrency’s sudden financial instability. For example, the TerraUSD caused havoc without a trace last month: about €38.2 billion was lost in the crypto world. Cryptocurrency losses and crashes happen with little or no accountability – among the issues addressed by the European rules.
Licensing, versatility, and across states services
Among the rules is the one concerned with interstate services: a crypto company in one EU country would, with all effects, be licensed to practice cryptocurrency services in other states in the EU.
Although the EU rules show outstanding structures and benefits, it is said to be effective in 2024. Not to forget that the rules fight against terrorism funding, money laundering, and other financial crime.
The rules adapt the bank rules of money laundering into the crypto world. Now, transferring cryptocurrency assets demands the sender and receiver information. And this is the approach to stop financial crime, where money laundering is prime.
The crypto companies will comply with any investigation requiring personal data collection. Bodies like anti-money laundering or anti-terrorist financing are majorly concerned. No one escapes the rules: although it favors the consumer on a high scale, many other parts are played by the consumers. For example, the sender and the receiver face investigation in the case of money laundering.
Presently, the EU rules have not been approved. The rules undergo several reviews and update prior to the final agreement and conclusion. However, these are the breakdown of the rules: the EU – new cryptocurrency regulations.