The European Union Announces the New Step on the Supervision of Cryptocurrencies!

European Union, cryptocurrencies It is preparing to create a brand new regulatory body that will oversee it directly.

While the crypto industry’s attention is on Markets in Crypto Assets (MiCA) and the controversial Fund Transfer Regulation, they form part of a broader EU anti-money laundering (AML) policy package that will have significant implications for all financial institutions.

The European Commission published its proposal for the Sixth AML/CFT Directive, AMLD6, last July. The Council of Europe published its own version last month.

European Parliament to Discuss Cryptocurrency Controller New Institution After August Vacation

The European Parliament will take up the issue after the ongoing August recess. After adopting their own version of the charter, the three institutions will engage in largely closed negotiations, called tripartite negotiations.

At the heart of the new legislation is the creation of an EU-wide regulatory body for the prevention of money laundering.

While legislatures should be able to negotiate the issue, there doesn’t seem to be much disagreement about the need for such a regulator and that it should have direct oversight over crypto-asset service providers in the EU.

In the past, the European Parliament has been the most aggressive of the three institutions in calling for the regulation of cryptocurrencies. Therefore, it is unlikely that this institution would oppose giving the future regulator direct control over crypto.

The regulator, called the “Anti-Money Laundering Authority” or “AMLA” for short, will at least oversee “high-risk” crypto firms directly as financial service providers, according to the Commission and Council versions.

A shared parliamentary briefing describes the new system as follows:

“Auditing at EU level consists of a center and branch model, i.e. a competent auditor at EU level for a coordinating role for direct supervision of certain financial institutions, indirect supervision/coordination of other financial institutions and, as a first step, supervision of the non-financial sector.”

The timetable for implementation will depend on the negotiations between the European Parliament as well as on subsequent tripartite talks involving the commission.

Implementation of the regulation, including AMLA’s staff, is expected to take years.

On the other hand, the EU recently bitcoin It had discussed banning cryptocurrencies using the Proof of Work system, but it was backed down after the backlash.

*Not investment advice.