On Tuesday, the European Union (EU) member states unanimously approved the world's first comprehensive set of regulations for crypto-assets, increasing pressure on countries like Britain and the United States to catch up. The rules, which were negotiated with the European Parliament and received approval in April, are set to be implemented starting in 2024.
The urgency to regulate cryptocurrencies has heightened among regulators following the collapse of FTX, a major crypto exchange. Elisabeth Svantesson, the finance minister for Sweden, which currently holds the EU presidency, stated that recent events have underscored the critical need for rules that protect European investors and prevent the misuse of cryptocurrencies for money laundering and terrorist financing.
Under the new regulations, companies operating within the 27-country EU bloc will need to obtain a license to issue, trade, and safeguard crypto assets, tokenized assets, and stablecoins. Ministers have also taken measures to combat tax evasion and money laundering by implementing transaction tracing, mandating that service providers collect the names of senders and beneficiaries of crypto assets starting from January 2026, regardless of the transfer amount.
Additionally, the ministers reached an agreement to amend taxation cooperation rules among member countries to include transactions involving crypto-assets and to share information on advance tax rulings for high-net-worth individuals.
Crypto firms are advocating for regulatory certainty, increasing pressure on countries to adopt EU regulations and urging regulators to develop global standards for cross-border activities.
Britain has outlined a phased approach to regulation, beginning with stable coins and gradually expanding to include un-backed crypto assets, but a definitive timetable has not been established. Meanwhile, the United States has primarily relied on existing securities regulations for enforcement actions in the crypto sector while deliberating on the introduction of tailored regulations and determining the responsible authorities.
Hester Peirce, a commissioner at the U.S. derivatives regulator CFTC, acknowledged the ongoing uncertainties, stating that various federal and state authorities are currently exploring their potential oversight roles in the crypto sector. "We are still navigating uncharted territory," Peirce commented during a conference.