EU Member States Approve World First Crypto Rules
European Union member states granted final approval to the world's first comprehensive framework of regulations for crypto assets, increasing pressure on other countries like the United Kingdom and the United States to catch up.
The rules, which were agreed upon with the European Parliament and received its approval in April, were endorsed by EU finance ministers during a meeting in Brussels. It is anticipated that the regulations will be implemented starting from 2024. The collapse of the FTX crypto exchange has heightened the need for regulators to swiftly establish regulations for cryptocurrencies.
Elisabeth Svantesson, the finance minister of Sweden, which currently holds the EU presidency, stated that recent events have underscored the importance of introducing rules to safeguard European investors in crypto assets and prevent the misuse of the crypto industry for money laundering and terrorism financing. The approved regulations in the European Union now require companies operating in the 27-country bloc to obtain a license if they wish to issue, trade, and secure crypto assets, tokenized assets, and stablecoins.
The aim of these rules is to combat tax evasion and money laundering by implementing measures to facilitate easier tracking of crypto asset transactions. Starting from January 2026, service providers will be required to collect the names of senders and beneficiaries involved in crypto asset transfers, regardless of the transfer amount.
Additionally, there is an agreement to amend tax cooperation rules among member countries to cover crypto-asset transactions and exchange information regarding advance tax rulings for high-net-worth individuals. Crypto firms have expressed their desire for regulatory certainty, which puts pressure on countries to emulate the EU's regulations and on regulators to establish global standards for cross-border activities in the crypto industry.
In the case of Britain, their approach will be phased, initially focusing on stablecoins, and later expanding to include un-backed crypto assets, although a specific timetable has not been set. In the United States, existing securities rules are currently being used for enforcement actions in the crypto sector, while the decision on whether to introduce bespoke regulations and determine the applicable regulatory authority is still under consideration. Various federal and state authorities are exploring potential oversight roles in the crypto sector, as mentioned by Hester Peirce, a commissioner at the U.S. derivatives regulator CFTC, last week.
Sources:
https://www.investopedia.com/eu-member-states-accept-new-crypto-rules-7498756
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