Work on EU rules on markets in crypto-assets is now gathering pace. On 5 October, the European Council approved a proposal for a Regulation on Markets in Crypto-assets (MICA). The Regulation is part of the digital finance package, which includes strategies on digital finance and retail payments and legislative proposals on crypto-assets and digital resilience.

The published proposal is quite different from the version presented in March 2022 in terms of increased investor protection. Less emphasis has been placed on ensuring the privacy of participants and on the degree of network decentralisation. One of the most important provisions is the provision on the responsibility of crypto-asset providers for protecting consumers’ wallets if the providers lose investor assets. Another element is the ‘travel rule’, i.e. the rule that requires wallet providers to report information about the payers and payees in the crypto-currency transfers, no matter the size of the transfer.

The issuance of and trading in stablecoins will be regulated, and the supervision of the market will be exercised by the European Banking Authority.

The EU regulatory authorities are planning to adopt the Regulation on MiCA in the first quarter of 2023, with an adjustment period of 12 to 18 months for specific provisions.

Source: https://www.forbes.com/sites/mitchellmartin/2022/10/08/crypto-rules-in-eu-lean-toward-investor-protection-away-from-privacy/?sh=52dcc1e37586.