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EU seeks deal on ground-breaking rules for crypto regulation

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EU seeks agreement on key rules to regulate crypto

The European Union (EU) will on Thursday seek agreement on key rules to regulate crypto assets as the fall in bitcoin has put pressure on authorities to rein in the sector.

Globally, crypto assets are largely unregulated, with national operators in the EU only needing to show controls to combat money laundering.

While meeting additional capital and consumer protection regulations, a deal would put the EU ahead of the global regulatory pack by giving issuers of crypto assets and providers of related services a “passport” to serve customers in the EU from a single basis .

Industry executives say clarity on regulations and passports could attract rival London-based crypto firms. The United States and the UK, two crypto hubs, have not yet approved similar regulations.

The European Parliament and representatives of EU states meet to conclude a deal on markets in crypto assets (MiCA) law, which will come into force at the end of 2023.

A source close to the talks said three issues remain: non-fungible tokens (NFTs), supervision and energy consumption.

With the authorization and supervision of crypto firms at the member state level, the scope of the MiCA is likely to focus on the inclusion of token-like NFTs only. The European Commission will assess the energy footprint of crypto assets, the source said.

Firms operating in an EU state will have 18 months after the start date to obtain MiCA licenses without interruption of service.

Crypto assets came under pressure following the collapse of TeraUSD and Luna Token last month, with major US cryptocurrency lending firm Celsius Network halting withdrawals and transfers this month.

Bitcoin dropped to around $17,600 this month and is currently trading around $20,100, well below its late March level of $48,200, causing losses for investors.

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