EU threatens to track crypto payments
Back in the spring, the European Parliament agreed on the “Law on Crypto Markets” (MiCA) — comprehensive rules against illegal transfers. The law was adopted as part of the fight against terrorism and money laundering.
What's new in the law, and how will this affect crypto transactions?
The rules provide that:
- 1. From 2024, information about the source of the asset will be known to both parties.
- 2. All companies that issue or trade cryptocurrency receive a license. This applies to 27 EU countries. It's time to address this issue if you want to work with cryptocurrency in Europe.
- 3. The law also requires cryptoasset service providers to automatically share information with the tax office (but the rules do not apply to person-to-person transfers).
- 4. The activities of companies violating this law will be prohibited/restricted by the authorized body.
- 5. Companies are required to report on the impact of their activities on the environment.
Cryptocurrencies such as Bitcoin track transactions through a blockchain record. Transactions can only be traced back to a user's public key, not to their actual personal information. This is precisely the reason why digital currency has become so popular. Time will tell how the new law will affect the demand for cryptocurrencies.
Our opinion is this: probably, the popularity will not fall. It’s just that market participants will accept new rules if they want to live and work in a civilized society.
Why was such an exceptional measure taken at all?
The European Union fears that widespread use of cryptocurrency could lead to financial instability. Europe has always been somewhat conservative, so it may never be possible to achieve complete freedom in the cryptosphere.
However, there are jurisdictions that are more favorable for doing business related to crypto assets. And consultants in the field of blockchain and crypto will help you choose them.
You have time to get your affairs in order and work legally in Europe!