The world’s first complete set of laws to govern cryptoassets received final approval from European Union states on Tuesday, adding pressure on nations like Britain and the United States to play catch-up.
Regulations were hammered out with the European Parliament and passed in April. The European Union’s finance ministers met in Brussels to ratify the guidelines.
The regulations are anticipated to go into effect in 2024.
Following the demise of cryptocurrency exchange FTX, policymakers now see regulating cryptocurrency as being more vital.
“Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of the cryptocurrency industry for the purposes of money laundering and financing of terrorism,” said Elisabeth Svantesson, finance minister for Sweden, which is currently holding the EU presidency.
According to the regulations, companies must seek a license in order to issue, trade, and safeguard cryptoassets, tokenized assets, and stablecoins throughout the 27-country bloc.
By making transactions more transparent, ministers have taken steps to prevent tax evasion and the exploitation of cryptoasset transfers for money laundering.
They decided that regardless of the amount being transferred, service providers must start requesting the names of senders and beneficiaries of cryptoassets starting in January 2026.
There was also agreement to modify the regulations governing member nations’ cooperation in taxation to include transactions using cryptoassets and to exchange information regarding advance tax judgements for the wealthiest persons.
Crypto companies assert that they desire regulatory certainty, placing pressure on governments to adopt EU regulations and on regulators to establish universal standards for a transnational business.
Although there is no defined deadline, Britain has detailed a staged strategy that would start with stablecoins and eventually include unbacked cryptoassets.
While it considers whether to adopt specialized new laws and who would apply them, the United States has concentrated on using existing securities rules for enforcement action in the industry.
A number of federal and state agencies are attempting to determine what supervision role they could play in the cryptocurrency industry, according to Hester Peirce, one of the commissioners of the American derivatives regulator CFTC, who made this statement last week.
Peirce said in front of a conference, “We are kind of wandering in the desert.”