Tether USDt

April

On April 20, the European Parliament <a href="https://www.cryptopolitan.com/eu-parliament-approves-mica-legistlation/" data-type="post" data-id="292496">gave the green light </a>to the European Union&#8217;s (EU) Markets in Crypto Assets (MiCA) regulations, moving the region closer to becoming the first to establish defined rules for the burgeoning cryptocurrency sector. The enforcement period is set to begin in June 2023, following the completion of a few remaining administrative formalities. However, the rules will not be implemented for 12 to 18 months.



The legislation aims to legalize cryptocurrency use and reduce associated risks, representing a significant step toward addressing the challenges posed by the increasing use of digital assets. The EU&#8217;s actions may serve as a blueprint for other jurisdictions.



<h2 id="understanding-the-mica-cryptocurrency-regulations">Understanding the MiCA cryptocurrency regulations</h2>



The regulations impose several obligations on cryptocurrency exchanges, token issuers, and traders. The MiCA rules will be founded on transparency, disclosure, authorization, and transaction oversight.



New token sales will be regulated, and platforms will be required to inform users of the risks associated with their operations. Stablecoins such as Tether and Circle&#8217;s USDC must maintain sufficient reserves to meet redemption requests in the event of large-scale withdrawals. 



Additionally, stablecoins that grow too large will have their daily transaction volume capped at 200 million euros ($220 million). Platforms must also maintain a daily average of 200 million euros and 1 million transactions for stablecoins not pegged to the euro.



The European Securities and Markets Authority (ESMA) will possess the power to intervene and ban platforms that fail to protect investors or jeopardize market integrity or financial stability. The MiCA regulations also address environmental concerns related to cryptocurrencies by requiring businesses to disclose their energy consumption and the environmental impact of digital assets.



A separate measure aims to decrease anonymity in cryptocurrency transfers such as Bitcoin (BTC) and stablecoins. Transfers exceeding the 1,000-euro limit between exchanges and self-custody wallets will necessitate reporting.



<h2 id="nfts-what-8217-s-exempt-from-mica-regulation">NFTs: What&#8217;s exempt from MiCA regulation?</h2>



Non-fungible tokens (NFTs) representing art, digital collections, or real estate will not be subject to MiCA regulation and will not be bound by the rules outlined in the text. NFTs will be considered fungible if fractionalized or produced in series, and since they can function as a form of payment, they will be subject to restrictions.



The EU&#8217;s progress puts it ahead of the U.S. and the UK, which have not yet introduced legal regulations for the crypto industry. A UK official stated on Monday that specific cryptocurrency regulations might be enacted within a year.



Once the EU legislation takes effect, crypto businesses will be able to &#8220;passport&#8221; their services across member states using licenses obtained in one European country.

Everything you need to know about the EU MiCA regulation on cryptocurrencies

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