Cryptocurrencies are currently experiencing one of the worst crises in their history, and now the EU has just added its two cents.
The bill had already caused a lot of talk, but its application was still uncertain. The veil of doubt was lifted this weekend, as the 27 EU member states found a point of agreement on the issue of crypto-assets and their regulation. If the extreme hypothesis of banning mining, which is too polluting, on the old continent had quickly been abandoned, the whole question this week lay in the small points of detail in the text of the law, which will make all the difference in the coming years.
The initial idea of the European Union is to put in place more regulation and control in the “Wild West of the cryptoworld” assures German MEP Stefan Berger in a press release shortly after the vote. The latter ensures that the Mica project (cryptoasset market) will be “harmonised, secure and on a level playing field”.
Fight against fraud and global warming
The two main points on which the European Union has long focused will have helped the fight against money laundering, as well as the climate issue. Cryptoassets are, by their decentralized side, a perfect gateway for many illegal uses such as the trafficking of narcotics, weapons, or money laundering.
Although the use of cryptocurrencies is much broader today, with a large majority of transactions based on completely legal grounds, cryptos still have difficulty breaking away from this image of “dirty money” that sticks to the skin.
The other very important point for the European institutions is the question of the environmental impact of this new market. With ever larger mining farms, the cryptocurrency market pollutes a lot and Europe wants to be able to fight against this.
In its legal text, the European Union explains that it wants to set up a control of the environmental impact of the main crypto-asset service providers (CASP). In particular, the latter will have to disclose their energy consumption and declare environmental and climate impact data to their national authority, which will in turn inform ESMA.
An unprecedented law for Europe and the world of cryptos
Very comprehensive, this first law also affects the world of cryptocurrencies with the popular Bitcoin and other Ethereum, but the law only speaks of “crypto-assets” thus including behind this term non-fungible tokens, in particular NFTs.
If this law, accepted by the 27 member states, is still modifiable, it should greatly reshuffle the cards with regard to crypto-assets. Europe could have unprecedented control of this new Web3 market which, in its very nature, was intended to be decentralized and far from any control by traditional physical instances known to all.