Introduction

The European Parliamentary Research Service (EPRS) proposes stricter supervision of the cryptocurrency market to enhance stability and promote growth.

The Need for a Strong Regulatory Framework

With the adoption of the Markets in Cryptoassets Act (MiCA), the EPRS underscores the need for a strong regulatory framework outside the European Union (EU).

Risk to EU’s Financial System

The European Parliament stresses that the EU’s financial system and its independence remain at risk due to its dependence on the actions of non-EU member states.

Lack of Proper Regulation

The report notes that the lack of proper regulation of cryptocurrencies will undermine financial stability and reduce the attractiveness of the market. Meanwhile, the extensive use of stablecoins is the main problem.

Status of Cryptocurrency Regulation Outside Europe

EPRS has provided a report on the status of cryptocurrency regulation outside of Europe. In the United States, regulation remains fragmented with multiple stakeholder involvement, which indirectly affects regulatory clarity and certainty.

“Given the global regulatory landscape, countries are taking a wide variety of approaches to the emergence of crypto assets; at least 19 sovereign jurisdictions have taken action so far.

EPRS report

The European Union’s MiCA Regulations

In the spring, the European Union adopted cryptocurrency market requirements known as MiCA.

These regulations will be effective from December 2024 and aim to facilitate the entry of cryptocurrency companies into the European market.

Starting in 2025, cryptocurrency transactions will be subject to supervision. Cryptocurrency exchanges will be obliged to report transfers to private wallets exceeding €1,000 to regulators.

Several countries have expressed their support for the European Union’s move to regulate cryptocurrencies. The United States, in particular, has considered using MiCA as a model for its own regulation.