The European Union chiefs now have an agreement to establish a new law, MiCA, to ensure stricter monitoring of crypto exchanges in the region. According to several sources, this new law will enforce a tougher regulation stance on exchanges using a single framework. The issue has been in the media for a while, with major discussions taking place in the last few months. After the agreement was made, the rapporteur, Stefan Berger, reported the news.
EU members say MiCA will provide a safe trading environment
According to the details of the information released by Berger, the move makes Europe the first continent to adopt a common regulation for the industry. When passed, the law in question, Markets in Crypto Assets, will seek to establish a common front to regulate several aspects of the crypto market. These aspects include digital assets not backed by the government, crypto exchanges, wallets, and stablecoin across the European Union.
Giving his opinion on the news, one of the European Union council chiefs from France claims that the new update will ensure that the Wild West in the crypto sector is halted. With the recent drastic event that involved Terra, this new law will ensure that stablecoin companies have a liquid reserve that will serve them sufficiently in times like that. According to one of the parliament, the reserve should be safe and enclosed and must be able to aid the company when there are threats of insolvency.
European Union focuses on consumer protection
One of the few exciting features of the new law is the cap that has been placed on transactions involving stablecoins which is set at 200 million per day. Users across the market must take to Twitter to react to the new law. Most of them feel that the cap is unrealistic as the average daily transaction of USDT is now around 43 billion. Another stablecoin high up in the daily volume is USDC which posts an average of 5.4 billion euros daily.
The twitter populace also feels that the council will have more work in their hands if they plan to push this law on decentralized stablecoins. The law will also look to protect investors from crypto platforms. In this case, platforms will be liable for sanctions should they mishandle users’ funds. The new law will also warrant platforms to provide white paper for digital assets with unknown issuers. This will ensure that users are protected from being fed fake information.