EU lawmakers agree on new rules for cryptocurrency

The European Union has agreed on ground-breaking rules for regulating cryptocurrencies, as the rout inBitcoin puts pressure on authorities to rein in the sector, according to EU lawmakers on Thursday.

National operators in the EU are not required to show controls for combating money laundering, because of the fact that cryptocurrencies are largely unregulated.

Representatives from the European Parliament and EU states thrashed out a deal on the markets in the MiCA law, which is expected to come into force around the end of 2023.

Stefan Berger, a centre right lawmaker who led negotiations on behalf of the parliament, said today we put order in the Wild West of Crypto assets and set clear rules for a harmonised market.

Berger said that the recent fall in the value of digital currencies shows us how risky and speculative they are and that it is fundamental to act.

Ernest Urtasun, a Green Party lawmaker in the parliament, said that MiCA will be the first comprehensive regime for cryptocurrencies in the world and will contain strong measures to guard against market abuse and manipulation.

The new law gives issuers of cryptocurrencies and providers of related services a passport to serve clients across the EU from a single base while meeting capital and consumer protection rules.

Two major criptocurrencies centres in the United States and Britain have yet to approve similar rules.

After the collapse of TerraUSD and Luna last month, with a major USCryptocurrency lending company, Celsius Network, has this month frozen withdrawals and transfers. The last month, it fell to around $17,600, and was trading around $18,900 on Thursday, well below its late March level of $48,200, as investors nurse losses.

The negotiations on Thursday focused on issues such as supervision and energy consumption of criptocurrencies.

Berger said that they had agreed that cryptocurrencies asset providers should disclose the energy consumption and environmental impact of assets in the future.

The EU states will be the main regulators for cryptocurrencies, though the bloc's securities watchdog ESMA will have powers to step in if investor protection or financial stability is threatened, lawmaker Urtasun said.