Europe Takes the Lead in Crypto Regulation with Digital Euro Plan

The European Parliament has approved the EU Commission’s proposed MICA legislation, which aims to create uniform regulatory standards for the cryptocurrency industry across EU countries. The legislation will be sent to the European Council for final approval in the coming months.

The proposed law introduces comprehensive safeguards and regulations to protect clients and investors, including the requirement for crypto exchanges to hold clients’ funds and adequate capital buffers.

Stablecoin issuers must prove their stablecoin is backed 1:1 with cash. The regulations also include extensive anti-money laundering (AML) and know-your-customer (KYC) regulations.

The European Commission is also preparing for the launch of the digital Euro, with the consultation process underway until June 16. Payment industry specialists, providers, and regulators are among the stakeholders expected to provide feedback.

The European Central Bank (ECB) has long advocated for the digital Euro, seeing it as a step toward widespread digital payments. ECB President Christine Lagarde has also encouraged lawmakers to speed up the process.

The EU is one of the first major international institutions to adopt a digital currency and the first to introduce a comprehensive regulatory framework for the crypto industry.