EU Passes Law That Requires Identification For All Crypto Transactions

May 19, 2023 3:33 pm Comments

The EU had recently made news when they were able to pass the new Markets in Crypto Assets (MiCA) regulation framework that would provide regulatory clarity for crypto.

The framework had received final approval  as it was signed off by the finance ministers and is expected to bring a centralized set of laws for all EU member states.

On the other hand, the new law also requires that all crypto transactions require identification which is unfortunate.

This is due to the fact that crypto was designed to be decentralized and anonymous which means requiring identification is a step in the wrong direction.

Many other regions in the world are also putting forth such requirements, but it is unclear how exactly they will enforce the rule. reports:

The latest move will definitely put extra pressure on Britain and the United States. However, it is definitely going to be extra pressure for the US, where there is regulatory uncertainty hovering around. The MiCA law is set to be rolled out in 2024.

Elisabeth Svantesson, finance minister for Sweden, stated: “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.”

The European lawmakers had earlier laid down a crypto tax proposal to fund the European Union in January.

The latest MiCA low will require companies that want to trade, safeguard, and issue crypto and stablecoins in the EU states to obtain a license.

MiCA is expected to be implemented sometime in 2024 so there is still sometime before the new regulatory framework takes effect.

It is unsure how the markets will react in the long term, but investors see clarity to be a good thing as it will attract more institutional capital.

This latest move will certainly apply more pressure on the United States to develop its own regulatory framework sooner than later.

So far, the regulatory landscape still remains unclear in the US which means many investors are hesitant about investing in crypto firms in the country.

Blockonomi reports:

The European Union’s recent decision will create added challenges for other countries, particularly for the United Kingdom and the United States. The move is expected to impact the US more due to existing regulatory uncertainties.

The MiCA law, which aims to protect European investors and prevent crypto-related money laundering and terrorism financing, is scheduled to be implemented in 2024.

Sweden’s finance minister, Elisabeth Svantesson, emphasized the importance of implementing these rules to safeguard European investors and prevent misuse of the crypto industry.

In January, European lawmakers also proposed a crypto tax plan to generate funds for the European Union. Under the new MiCA law, companies wishing to trade, store, and create cryptocurrencies and stablecoins within EU member states must obtain a license.

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