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The Council of the European Union adopted two proposals for digital assets on Wednesday, aiming to create regulatory frameworks for crypto assets focused on consumer protection and mitigating cyber threats. Both the Regulation on Markets in Crypto Assets (MiCA) and the Digital Operational Resilience Act (DORA) are part of the Council’s digital finance package. Governments around the world are actively working on cryptocurrency-related regulations.
Council of the European Union is moving ahead with the two proposals.
That finance package also contains the Council’s overall strategy related to crypto asset regulation and a proposal on distributed LEDGER technology. The intention is to create unified rules of the road for crypto in the EU to foster innovation with investor protection throughout member states, rather than allowing a fragmented approach to form in which standards differ from nation to nation. “A dedicated and harmonized framework is, therefore, necessary at Union level to provide specific rules for crypto-assets and related activities and services and to clarify the applicable legal framework,” read a proposal in the package.
CBDCs are exempt from the framework.
The MiCA creates a financial framework for the issuance and services related to transferrable crypto assets, mainly calling on firms to be transparent in their operations through white papers submitted with any prospectuses and mandating that marketing be “fair” and “clearly identifiable” as ads. Any central bank digital currencies or tokens issued by other public authorities are exempt from the framework, as are tokens that function like loyalty points, non-fungible tokens (NFTs), or tokens representing physical assets or services. The proposal is also clear that the regulations will apply to natural or legal persons, not the tech itself.
