The European Union’s executive branch has developed plans for a comprehensive digital asset framework for the entirety of the 27-member bloc.
The European Commission has proposed legislation to turn cryptocurrencies into a regulated financial instrument.
The bill, which is called “Regulation on Markets on Crypto Assets” (MiCA), provides clarity on the definition of a “crypto asset” and provides definitions for various token subcategories.
The bill provides rules on digital asset custody and capital requirements and stipulates the relationship between the token issuer and holder, including procedures for investors to file complaints against projects.
Officials suggested a regulatory sandbox initiative for companies developing trading and settlement infrastructure for digital assets. MiCA would turn the EU into the most significant regulated space for crypto anywhere in the world. The framework would apply to all 27 member states, granting regulated crypto companies the ability to operate throughout the bloc.