According to Patrick Hansen, a crypto venture advisor, the regulations would greatly affect the European crypto market. The EU is working on two major regulations: the Transfer of Funds Regulation (TFR) and Markets in Crypto-Assets (MiCA).
The MiCA would regulate most activities of the crypto industry in EU states. For the upcoming meeting, the EU Council, Commission, and Parliament will decide on the remaining topics.
Afterward, it would release proper regulations for the crypto sector. Their final meeting regarding both bills will occur on the 30th of June.
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Furthermore, Hassen noted that the EU discussion would also center on NFTs. This is to determine if they should be part of the MiCA bill. At first, the European Commission wanted to add it to the bill.
However, the Parliament and Council were not in support. Currently, it seems the three organizations have agreed to include it.
Reports state that the comprise might likely include excluding issuers of NFTs. Still, companies that provide third-party NFT services will be within the regulation’s scope.
As a result, they would need to license called Crypto Asset Services Provider (CASP) to operate. In addition, there would be discussions on stablecoins. Stablecoins have become a major topic following the recent Terra crash.
Although some regulations have been made, some aspects are still left. Examples of such aspects include the body that would handle the supervision of stablecoins.
Also, there is the issue of technical thresholds for stablecoins. The supervision could be by national authorities or via a uniform institution for the continent.
Regulation For DeFi To Be In 2023
Meanwhile, DeFi would be exempted from the MiCA bill. The association will publish a report on DeFi in 2023. Afterward, it would form a pilot initiative for its supervision.
As regards the TFR, they have not discussed several topics. Therefore, the negotiations might be contentious. Meanwhile, the EU would tag all cryptocurrency transactions under TFR except for P2P transfers.
Unfortunately, it is uncertain if the three bodies will rectify all these issues before the end of June. Other issues left include the AML blacklist, verification of anonymous wallets, CASP requirement for transactions above €1,000, and more.