Regulation and licensing of cryptocurrencies in Europe and the CIS A few years ago, when most countries had not yet determine their position on blockchain and cryptocurrencies, regulation at the legislative level was quite diverse – from the issuance of national cryptocurrencies to a complete ban and criminalization. In some jurisdictions, there is still some ambiguity, which only emphasizes the dual nature of this area.
The hesitation of politicians
Regarding crypto assets is understandable. The financial side has many subtleties, which governments are usually in no hurry to touch upon without urgent nee. On the other hand, authorities are increasingly intereste in blockchain technology and its application in other areas.
However, things are starting to change slowly. Blockchain applications in areas other than finance are still in the development stage, but nevertheless, legislation regulating the circulation of cryptocurrencies has already appeare in various countries. Thus, the authorities realize that they can benefit from the financial component of the cryptocurrency phenomenon, and over the past couple of years, a trend has been observe in various countries to develop a legislative framework.
We will analyze the most interesting
Cases of regulation implementation or its absence, provide links to regulations and other useful publications. Then we will draw conclusions about how governments are trying to balance the crypto economy.
Regulation and licensing of cryptocurrencies in Europe
Update as of April 2023: World’s first comprehensive cryptocurrency regulation approve in EU
The European Parliament has approve the first ever set of regulations aime at regulating the cryptocurrency industry.
The Markets in Crypto
Act (MiCA) is designe to reuce risks for consumers investing in cryptocurrency, with service providers potentially being held liable if investors lose their crypto assets. The EU parliament said on Thursday that the rules will impose various obligations on crypto platforms, token issuers and traders, such as disclosure, authorization and transaction supervision.
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Crypto platforms will be require
To inform their consumers of the risks involve, and the sale of new tokens will be regulate. Stablecoins like Circle’s USDC and tether will be transforming customer experience with salesforce require to have sufficient reserves to cover reemption requests in the event of a run. Additionally, if stablecoins show too much growth, their volume will be cappe at €200 million ($220 million) per day. The European Securities and Markets marketing list Authority (ESMA) will have the power to ban or restrict crypto platforms that fail to adequately protect investors or threaten market integrity or financial stability. Finally, MiCA also addresses environmental concerns, requiring companies to disclose energy consumption and the environmental impact of digital assets.
The European Union has also require
Financial companies to apply a “travel rule” to cryptocurrency transactions to combat money laundering. This means that financial companies will have to check, record, and transmit information about both the sender and recipient of cryptocurrency transactions. Transfers between exchanges and self-hoste wallets owne by individuals will have to be reporte if the amount excees €1,000.
The law puts the EU ahead of the US and the UK, which have yet to introduce formal regulations for the crypto space. The law also allows crypto companies to use their licenses in one European country to provide their services in different EU member states. As a result, many crypto companies rushe to obtain licenses from various European authorities and open new offices ahead of the law coming into force.
European Securities and Markets
Many European countries still have a rather conservative position on cryptocurrencies. There is still no officially adopte legal classification of digital assets at the level of the entire European Union, so one should focus on the legislation of each specific country.
In 2019, however, several international and European regulators conducte and publishe studies on the legal status of crypto assets and initial coin offerings (ICOs) in order to provide greater clarity to competent authorities and legislators. The most significant of these are liste below (publications are in English):
Luxembourg also issue a circular defining the tax rules for cryptocurrencies. In particular, professional activities relate to mining or selling cryptocurrencies are subject to normal tax rules, while similar non-professional activities may be subject to the same rules as speculative income if the transactions were made with assets that were store for less than six months. As for indirect taxes, financial services are not subject to VAT under EU law.
European Banking Authority
Regulators: Financial Market Supervision Commission (Autorité des marchés financiers, or AMF), Financial Market Supervision and Resolution Authority (Autorité de contrôle prudentiel et de resolution, or ACPR).
Crypto exchanges: legal, regulate.
According to the requirements
The French Direction générale des Finances publiques (DGFP), profits from the sale of cryptocurrencies are taxable. Moreover, in France, cryptocurrency savings are taken into account when calculating the “wealth tax,” and the free transfer of cryptocurrencies from one person to another may be subject to a gift tax.
Another interesting aspect of the legislation regarding ATMs is that the AMF and ACPR allow the purchase or sale of digital assets (i.e. cryptocurrencies) for legally circulating currency as an ATM function. This service is subject to registration under the Monetary and Financial Code.
