The first thorough set of regulations for the cryptocurrency industry have been passed by legislators in the European Parliament. The Markets in Crypto Act, also known as MiCA, was approved by the EU Parliament on Thursday with 517 votes in favor and 38 votes against.
The regulation, which aims to lower risks for customers purchasing cryptocurrency assets, will make providers accountable if they misplace customers’ cryptocurrency assets.
The EU Parliament stated in a statement that the rules will put a variety of responsibilities on cryptocurrency platforms, token issuers, and dealers around transparency, disclosure, authorization, and supervision of transactions.
Additionally, sales of new tokens will be subject to regulation. Platforms will be compelled to advise users of the dangers involved with their operations.
It will be necessary for stablecoins like tether and Circle’s USDC to keep enough reserves on hand to fulfil redemption requests in the case of large-scale withdrawals. Stablecoins that grow too big risk having their daily transaction volume restricted to 200 million euros ($220 million).
If it is determined that cryptocurrency platforms do not adequately safeguard investors, endanger market integrity, or threaten financial stability, the European Securities and Markets Authority, or ESMA, will be given the authority to intervene and ban or restrict those platforms.
MiCA also addresses the environmental issues related to cryptocurrencies, requiring businesses to disclose their energy usage as well as the environmental effects of digital assets.