European Union legislators are planning to change some of the regulatory rules related to cryptocurrencies. 3 of the most important of these changes are: limiting the activity of banks in the field of crypto, tax on cryptocurrencies and the supply of digital euro. None of these plans have been approved yet, and a decision will be made about them this year.
According to Mihan Blockchain and quoted by CoinDesk, previously the European Union legislators had put a project known as the Cryptocurrency Market Regulation (MiCA) on the agenda, which faced widespread reactions and remained silent for a long time. Now, with the beginning of 2023, their decision to enter the world of cryptocurrencies has become more serious.
1- Limiting the activities of banks in the field of crypto
Part of the new changes considered by the European Union is the application of strict rules for the activities of banks in the field of cryptocurrencies. It is supposed to be in the new framework:
- Banks should report their cryptocurrency assets to regulatory bodies
- Most of the banks’ reserves should be in the form of cash and low-risk assets, and a ceiling should be set for the maximum percentage of reserves that can be in the form of crypto.
- As much as possible, leveraged investments and loans in the field of crypto (DeFi) should be avoided.
The reason for these restrictions is to protect bank customers against high fluctuations in the field of cryptocurrencies. If this plan is approved, we will witness its implementation from 2025.
2- Tax on cryptocurrencies
The annual budget of the European Union is about 185 billion dollars. If approved, a part of this budget is supposed to be funded through a tax on cryptocurrencies. Taxes on cryptocurrency mining, value added tax on crypto-investments and tax on cryptocurrency transactions are supposed to be applied.
Lawmakers have until February 2 to make changes in this draft and prepare its final version.
3- supply of digital euro
Another decision of the European Union is to determine the final strategy regarding the launch of the digital Euro (CBDC shared by the EU member states) as well as Metaverse. The European Union authorities are going to examine these issues from the two angles of threats and risks in that area, as well as the entry and activity of the EU in these areas, and in addition to defining the regulatory frameworks, they will draw a strategy for the future in facing it.
The final strategy of the European Union in this regard is supposed to be announced in May.
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