The proposed European Union Regulation on Markets in Crypto Assets, or MiCA, (hereinafter the “regulation”) was put to a vote in the European Union Parliament’s Committee on Economic and Monetary Affairs on March 14, 2022, and in the end, the proposed amendment to ban or restrict proof-of-work-based crypto assets, which would have effectively resulted in a ban on Bitcoin (BTC), was rejected.

The question of how crypto assets will be assessed from an environmental regulation perspective remains, however, with the Member of the European Parliament in charge of the text indicating that crypto assets will be included, like all other financial products, in the area of the union’s taxonomy (the process of classifying economic activities that have a favorable impact on the environment), without specifying the treatment of these assets in view of this taxonomy.

The proposed regulation is part of the digital finance package that also includes a proposal for a pilot scheme for market infrastructures based on distributed ledger technology (DLT) of interest to the security token sector, adopted by the Parliament’s Economic and Monetary Affairs Committee in January this year and due to come into force by the end of 2022.

The EU Commission has been considering several options for regulating the crypto asset sector. It finally chose the option of full harmonization within the EU of the rules applicable to issuers and service providers in crypto assets, with an EU passport, over the option of an opt-in regime to obtain the EU passport with the application of national regimes. For stablecoins, the Commission has favored a tailor-made legislative regime combined with regulation under the E-Money Directive.

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