Cryptocurrencies in the EU: new rules to boost benefits and curb threats
13 may 2022
Repubblica Italiana
On March 14, 2022, the Economic and Monetary Affairs Committee (MEPs) agreed on draft rules on supervision, consumer protection and environmental sustainability of crypto-assets, including cryptocurrencies such as bitcoins.
Crypto-assets, including cryptocurrencies, are neither issued nor guaranteed by a central bank or a public authority. They are currently out of the scope of EU legislation. This creates risks for consumer protection and financial stability, and could lead to market manipulation and financial crime. The draft legislation differentiates between crypto assets in general, asset referenced tokens (ARTs), also called “stable coins”, and e-money tokens primarily used for payments.
Mechanisms used to validate transactions in crypto-assets have a substantial environmental impact, particularly for proof-of-work mechanisms, requiring a lot of energy and resulting in a high carbon footprint and generating electronic waste. According to most estimates, the energy consumption of Bitcoin equals that of entire small countries.
The purpose of Meps is to allow:
- Uniform legal framework for crypto-assets in the EU
- Consumer protection and safeguards against market manipulation and financial crime
- Include crypto-assets mining in EU taxonomy for sustainable activities by 2025 to reduce carbon footprint
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