The EU Parliament has voted on a new set of rules that support the tracing of crypto asset transfers in the same way as traditional money transfers. Specifically, MEPs approved with 529 votes in favour to 29 against and 14 abstentions the first piece of EU legislation that allows the tracing of crypto-asset transfers, including bitcoin and electronic money tokens.

The Transfer of Funds regulation was provisionally approved by Parliament and Council negotiators in June 2022. The primary goal of this endeavour is to ensure that crypto asset transfers can always be traced and that suspicious transactions can be blocked. The actual implementation of the law will rely on the ‘travel rule,’ which mandates that any information on the source of the asset and its beneficiary will have to ‘travel’ with the transaction and be stored on both sides of the transfer.

In the case of self-hosted wallets, the new law will cover transactions above EUR 1000 when hosted wallets managed by crypto-assets service providers are involved. However, it’s worth noting that the rules won’t become applicable to person-to-person transfers conducted without a provider. Markets in Crypto Act (MiCA) has passed MiCA has finally passed with 517 votes in favour to 38 against and 18 abstentions following an initial vote postponement due to technical difficulties related to the document’s translation.

MiCA aims to regulate insider trading, unlawful disclosure of inside information, as well as other market manipulation attempts related to cryptocurrencies to preserve the integrity of the market. Thanks to this new law, consumers will be better informed about the costs, risks, and charges linked to their operations. Furthermore, the new legal framework will support market integrity and financial stability by regulating public offers of crypto assets.

To combat money-laundering risks, the European Securities and Markets Authority (ESMA) aims to create a public register that will include non-compliant crypto asset service providers that operate in the European Union without authorisation. In essence, MiCA aims to minimise the risks associated with consumers buying crypto assets by making providers liable if they lose their investors’ crypto assets. The issue of the high carbon footprint associated with cryptocurrencies has also been addressed, as service providers will have to disclose their energy consumption.

According to cnbc. com, stablecoins such as tether and USDC will need to maintain adequate reserves to meet redemption requests in the event of mass withdrawals. Stablecoins that become too large also face being limited to EUR 200 million (USD 220 million) in transactions per day.

.