EU legislators are estimated to finalize regulations on proof-of-mining crypto activities and unhosted wallets by the end of June.
Such regulation will have enormous implications for the crypto industry in Europe and globally.
The crypto community is anxiously watching as EU legislators finalize regulations that will affect proof-of-mining activities and unhosted (non-custodial) wallets within the region.
According to Patrick Hansen, a Crypto Venture Advisor at Presight Capital, the two bills will most likely be finalized by the end of this month. Furthermore, their approvals as is, or with modifications, will ‘have huge implications for the crypto market in the EU and beyond.’
NFTs, Stablecoins, DeFi, and Environmental Impact Remain the Main Topics of the MiCA Bill.
For the MiCA bill, Mr. Hansen explains that the legislation is in the trialogue stage where all three EU institutions of the Council, Parliament, and Commission meet on June 30th to discuss and possibly agree on a few topics that need to be worked on further.
Firstly, the legislators need to decide whether NFTs fall under the MiCA bill and whether to include consumer protections. Secondly, stablecoins issuance will be determined, including the possibility of implementing thresholds and supervision.
Thirdly, the DeFi industry might just be exempt from the reach of the MiCA bill, with a separate report being scheduled for 2023. Fourthly, the environmental impact of crypto operations in the EU will be ironed out given that Europe’s legislators have already decided that it would not completely ban Proof-of-Work blockchains such as Bitcoin.
Proposal for AML and KYC Procedures When Transacting with Unhosted (Non-Custodial) Wallets.
For the EU proposed bill to implement AML and KYC procedures when transacting with unhosted (non-custodial) wallets, the region’s legislators still have the following to debate:
Verification of unhosted wallets. The EU parliament favors the proposal, but the Council and Commission are against it.
The EU council suggests that crypto-asset service providers implement on-chain analytics to address the AML risk.
There is also the debate on whether to keep the requirement to declare transactions over one-thousand euros to be reported to relevant authorities.
At the time of writing, it is not clear whether the EU legislators will agree on all the issues of the second bill regarding Un-hosted wallets. Consequently, deliberations could roll into the second half of the year.