The European Parliament has passed new laws that will involve monitoring of Crypto-asset service providers (CASPs) by the government. This was approved on April 24 with the aim of improving due diligence measures and identity checks for consumers. These laws will apply to all entities operating in the jurisdiction, including CASPs, and fall under the broader Markets in Crypto-Assets (MiCA) regulation.
MiCA was developed by the European Commission in 2020 and was approved in June 2023 to regulate cryptocurrency assets within the European Union in order to protect investors and maintain financial stability. As part of the new laws, a new entity called the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will be created. This supervising body, headquartered in Frankfurt, Germany, will oversee the implementation of the new regulations.
According to Patrick Hansen, the EU strategy and policy director at Circle, CASPs will now have to adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures. This means that if CASPs comply with these regulations, crypto users in the nation will be able to use these platforms for buying goods and services with crypto, as long as the transaction value exceeds EUR 1000 (approx $1072). This move could potentially boost crypto-powered microtransactions in the EU, benefiting companies such as Strike, which recently expanded its services for European customers.
However, Hansen clarified that this requirement was already in place through existing regulations. All wallet providers and cryptocurrency exchanges operating in the nation are required to comply with these regulations. He also noted that the law will be officially adopted by the Council of the EU and will be enforced three years later. According to Hansen, the final version of the law is a positive result for the cryptocurrency sector, which has largely operated in a gray area.
