After hours of negotiations, the European Commission, EU lawmakers and member states have reached an agreement on a groundbreaking set of rules to guard against abuse and manipulation in the cryptocurrency market.
The new regulations, known as the Markets in Crypto-assets (MiCA) law, will require cryptocurrency companies to obtain a licence and meet struct capital and consumer protection rules in order to be allowed to operate in the EU. Companies issuing or trading crypto assets such as stablecoins will be forced to provide customers with detailed information on the risks, costs and charges that they face by obtaining these assets.
Under the new rules, stablecoins like Tether and Circle’s USDC will be required to maintain ample reserves to meet redemption requests in the event of mass withdrawals. Moreover, the European Securities and Markets Authority (ESMA) will also receive powers to step in to ban or restrict crypto-exchange platforms should they...