European Parliament Backs EU’s First Set of Regulations for Crypto Assets; Rules to Roll Out in 2024

The European Parliament on Thursday overwhelmingly backed the European Union‘s first set of rules to regulate cryptoasset markets.

Parliament voted by 517 in favour and 38 against to approve the world’s first comprehensive set of regulations for issuing and trading cryptoassets such as bitcoin.

“This regulation brings a competitive advantage for the EU,” said Stefan Berger, the lawmaker who steered the rules through parliament.

“The European crypto-asset industry has regulatory clarity that does not exist in countries like the U.S.,” Berger said.

EU states have already given the nod to the rules which will be rolled out from mid 2024, requiring firms that issue and trade cryptoassets to be licensed by a national regulator, giving them a “passport” to serve customers across the 27-member country bloc.

Major service providers will have to disclose their energy consumption.

“I hope that our rules could become a model for other countries,” the EU’s financial services chief, Mairead McGuinness, said in a debate on the rules on Wednesday.

Parliament also backed new rules for tracing transfers of cryptoassets like bitcoins and electronic money tokens.

It applies the international “travel rule” already used in traditional financial transactions, meaning information on the source and recipient of the cryotoasset will have to accompany and be stored on both sides of the transfer to help combat money laundering.

The tracing rule also covers transactions above 1,000 euros from “self-hosted” wallet or crypto address of a private user.

© Thomson Reuters 2023