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    Council of the European Union puts forward two proposals for crypto regulations

    The crypto proposal package also contains the Council’s general strategy on the regulation of cryptoactives and a proposal on distributed ledger technology (Image: Ronald Wittek/Pool via Reuters)

    This Wednesday, the Council of the European Union adopted two proposals for digital assets, with the aim of creating regulatory frameworks for cryptoactives, focused on consumer protection and the reduction of cyber threats.

    The Cryptoactive Markets Regulation (MiCA) and the Digital Operational Resilience Act (DORA) are part of the Council’s digital finance package.

    This package also contains the Council’s overall strategy on the regulation of cryptoactives and a proposal on distributed ledger technology.

    The intention is to create unified rules for crypto in the European Union, in order to promote innovation with investor protection in member states, rather than allowing the formation of a fragmented approach, in which standards differ from nation to nation.

    “A unique and uniform framework is therefore needed at the Union level to provide specific rules for cryptoactives and related activities and services, and to clarify the applicable legal framework,” points out one of the proposals in the package.

    “This uniform structure should also cover services related to cryptoactives, in which these services are not yet covered by Union legislation regarding financial services.”

    MiCA creates a framework for the issuance and services related to transferable cryptoactives, mainly calling on companies to be transparent in their operations through whitepapers submitted with any proposals, and demanding that the market be “fair” and “clearly identifiable” in adverts.

    Any digital coins issued by central banks (CBDCs) or tokens issued by other public authorities are exempt from the structure, as well as tokens that function as points in loyalty programs, non-fungible tokens (NFTs) or tokens that represent physical assets or services.

    The proposal is also clear that the regulations will naturally apply to individuals or legal entities, and not to the technology itself.

    DORA, on the other hand, creates risk management orders linked to information and communication technology. In addition to forcing testing of these systems to prevent cyber attacks, the proposal also creates a uniform framework for reporting any incident.

    It also empowers European regulators to look more closely at the use of third-party service providers employed in information and communications technology.

    The Council will enter into negotiations with Parliament on the proposals and, once an interim agreement is reached, both institutions will formally adopt the regulations.

    Source From: Moneytimes


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