European Union moves forward with regulatory agreement on cryptocurrencies and banks
As of 27 June 2023, European Union (EU) lawmakers have secured a political agreement on bank capital legislation regarding cryptocurrencies.
The agreement, published in a European parliament press release, focuses on keeping unsecured cryptocurrencies from entering the traditional financial system.
EU concludes regulatory agreement on cryptocurrencies
The European Parliament’s Economic and Monetary Affairs Committee announced the deal on its Twitter account. The announcement followed a meeting between the European Parliament, national governments and the European Commission.
The new agreement addresses a range of issues including environmental risks, levels of exposure to cryptocurrencies in banks and other banking issues. It also radically changes the way banks assess risk for different types of loans. Types of corporate and housing loans, among others.
One of the main focuses is to keep cryptocurrencies without a backing outside the traditional financial system. Banks will have to disclose their exposure to cryptocurrencies.
The European Council also stated that the agreement includes a specific regime for cryptocurrencies. This is how the Basel Committee on Banking Supervision is currently working on a set of rules to regulate cryptocurrencies.
Regulation of cryptocurrencies in Europe
There are various regulations at international level in relation to the world of cryptocurrencies. Depending on the legal asset that the legislation covers, the regulation may be of a fiscal, financial or compliance.
Recently, the European Union approved one of the most important pieces of legislation regarding cryptocurrencies, known as the MiCA Law.
As of the approval by the European Union of the MiCA Act, any company offering services related to cryptocurrencies will be required to register in one of the member states of the European Union.
It is essential to understand that there must be a principle of proportionality between EU regulations and the phenomena to be regulated, such as cryptocurrencies. This way it can be ensured that the law does not become harmful.
Source: Beincrypto
Disclaimer: The information set out herein should not be taken as financial advice or investment recommendations. All investments and trading involve risk and it is the responsibility of each individual to do their due diligence before making any investment decision.