jievani weerasinghe NHRM1u4GD A unsplash scaled 1 The European Union wants to tame the Wild West of crypto trading

The European Union wants to tame the Wild West of crypto trading

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– EU negotiators published a provisional agreement that marks the blocs first rules regarding tracing transfers of crypto assets, clamping down on illicit transfers and suspicious transactions.

– The most important part of the legislation is something that would force crypto trading platforms to store more data about transactions.

– The rules wont affect tokens without issuers, like bitcoin.

– The European Securities and Markets Authority also announced that the new rules, known as Markets in Crypto-Assets (MiCA), will force trading platforms to warn consumers about the risk of losses associated with trading digital tokens.

– This would also help protect some of the less savvy traders.

– The decision was also fueled by concerns over consumer protection, especially as the value of bitcoin, the worlds largest cryptocurrency, has plunged more than 70% from its all-time high in a matter of months.

– A so-called stablecoin (a cryptocurrency where the price is designed to be pegged to a cryptocurrency) called TerraUSD imploded virtually overnight, erasing an estimated $40 billion in investor funds with no accountability.

– Additional measures are expected to be presented in the following weeks, but the whole package will be finished 18 months from now.

– The effects of this move are expected to spill outside the continent and potentially become a global standard.

– But the EU will have a hard problem harmonizing the law between different countries.

– Ultimately, its unsurprising that the EU wants a more conservative and responsible approach toward cryptocurrencies.

 

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