- This significantly increases the chances of ratifying the bill in its original format.
- Also, the Council of the EU approved an amendment to the Directive on Administrative Cooperation
- They are designed to solve the problem of non-payers of tax on capital gains in cryptocurrency
Today, May 16, the EU Council of Ministers unanimously approved the Code of Practice for Crypto Asset Markets (MiCA) and the DAC8 amendment. This significantly increases the chances of final ratification of the regulatory framework. After that, the EU will become the first jurisdiction in the world to introduce a cryptocurrency licensing regime.
Earlier, we covered in detail both the regulatory framework itself and the potential effect of it. Recall that the EU stands for the global implementation of MiCA, which will make the sector more transparent and regulated.
This set of rules actually introduces a licensing regime for service providers. In addition, MiCA requires stablecoin issuers to hold sufficient collateral in physical assets. Market participants are also required to adhere to AML rules and implement a KYC mechanism.
As for the DAC8 amendment, which was also approved Advice, this is an analogue of the “Trade Rule” from the FATF. Its task is to stop the practice of hiding income by crypto-currency investors, using “gray areas”, where capital gains in digital assets are not taxed.
MiCA will enter into force one year after the official ratification, which is expected in June-July. As for the amendment, it is likely to come into effect after the change in the regulatory regime.
