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Updates on Europe's Coming Crypto Regulations

Updates on Europe's upcoming crypto regulations thread btc crypto

1. The European Union passed the "market in crypto assets regulation" MiCA bill sometime over the summer; specifically at the end of June. The regulation in the Bill will apply to every country in the EU.

2. This regulation will also overrule every National law about cryptocurrency in the EU because that's just how the EU works. The MiCA bill originally contained proposals like requiring KYC for all NFT marketplaces banning Defi & crashing btc price to get rid of proof of work

3. Note that MiCA does not contain any crazy proposals about tracking crypto transactions. Those are in a different Bill. 4. MiCA contains some concrete definitions for different kinds of cryptocurrencies and how they should be regulated.

5. As far as the EU is concerned, there are three types of cryptocurrencies. i-Utility tokens, ii- Asset reference tokens or ART's and iii-E money tokens or EMT's.

6. Utility tokens are any token that's not an ART or an EMT. They include erc-20 tokens like decentraland's mana and bitcoin. Under the version of MiCA from May, any crypto project that wants to conduct an ICO or have its coin or token listed on exchanges in the EU

7...must provide a detailed whitepaper and register with the relevant regulators.

8. Now, moving onto Asset referenced tokens or ART's. These are tokens that derive their value from some basket of assets. These include decentralized stablecoins like DAI, USDC & other stables.

9. According to MiCA from may, ART issues do not have to register with relevant EU authorities so long as their MC does not exceed 5 million euros which in not much at all.

10 If they exceed this low limit, they must maintain high-quality reserves and they cannot allow holders of their ART to earn yield.

11. Lastly, we have EMT's which are the centralized stablecoins. This includes USDC, USDT, and BUSD. I believe it also includes gold-backed stablecoins PaxG. Under the MiCA version from may, EMT's are subject to the same rules as ART's but with a lot more scrutiny.

12. Stable coins deemed significant will have their volumes capped at 200 mil euros per day. This is very low since all crypto's trade against stablecoins. These restrictions around stablecoins are they ART's or EMT's are due to EU's fear that stablecoins could replace the euro.

13. This is why the final draft of MiCA which leaked in late September 2022 revealed that some of the r restrictions on stablecoins had been removed. The final draft of MiCA is a whopping 1,050 pages long and I'd be covering it in another thread. Pls, follow for more. Cheers.

*The EU passed the quote MiCA sometime is summer specifically at the end of June.

This post is based on this twitter thread.


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