Written by Richard Wee and Sai Ganesh 

On the 16th of May 2023, the world’s first complete set of laws to govern crypto assets received final approval from European Union states on Tuesday, adding pressure on nations like Britain and the United States to play the ‘catch-up game’. This was said to be approved by the European Union Finance Minister in a meeting in Brussels. 

Policymakers now see regulating cryptocurrencies as being more vital due to the bankruptcy of the cryptocurrency exchange FTX in the US. This incident was a sign that drew the attention for a more stringent regulation on the cryptocurrency market.

‘Recent occurrences have reinforced the urgent need to enact regulations that will better safeguard Europeans who have invested in these assets and stop the cryptocurrency business from being abused for the purpose of money laundering and terrorism financing’, said by Elisabeth Swatesson, the finance minister for Sweden which holds the EU’s presidency. 

In gist, the set of laws may require the firms or businesses that would like to issue their crypto assets, will have to obtain a license and this will be applicable for the 27 bloc members of the European Union. This regulation is done to guard the industry and the citizens of the EU, and not for the same mistake which had taken place in America to reappear in Europe because this may leave a catastrophic impact on the economy which is already battling with the inflation at its maximum.

Besides that, these regulations will be expected to make their entrance by 2024. However, the cryptocurrency firms are urging other countries to adopt the regulations made by the EU for the betterment of cross-border transactions with cryptocurrency or assets. In addition, this piles up pressure on countries like Britain and America as they have a large number of crypto assets owners and very minimal law and regulations to oversee the market.

In summary, the regulations are a fundamental part of all sectors, and one being crypto. Crypto is a rapid development from all around the globe and has advanced with the help of technology. Hence, this requires stringent regulatory oversight and enforcement to protect this sector from being exploited by hackers and scammers.

Published on 4 July 2023

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