EU lawmakers passed a law on January 24 that requires banks investing in crypto to hold the euro equivalent of their cryptocurrency investments as capital.
The new cryptocurrency market will take effect on this date
The new law will come into effect in January 2025 to give banks ample time to adjust their finances, Reuters reported. The new bill aims to eliminate instability in the crypto market. In this context, European lawmakers on Tuesday supported a draft law to implement the final leg of post-financial global bank capital rules, adding “prohibitive” requirements to address the risks posed by cryptocurrencies.
EU Parliamentarian Markus Ferber detailed the bill, “Banks will be required to hold one euro of their own capital for every euro they hold in crypto. “Such prohibitive capital requirements will help prevent instability in the crypto world from spreading into the financial system.”
Meanwhile, the US, UK and other countries are taking similar steps, but the committee used the draft law to introduce new elements, including requiring banks to have enough capital to cover all of the cryptocurrencies.
According to the European Financial Markets Association (AFME), the new bill does not have a clear definition of what cryptocurrencies are. Therefore, it can also be applied to tokenized securities. As all EU countries have approved the bill, lawmakers will begin negotiating the final text with member states to complete the official scenario. As Kriptokoin.com, we have included the details of the crypto money vote in the Economic and Monetary Affairs Committee of the European Parliament on January 24th in this article.
EU Central Bank: Digital Euro will be free to use
In another development from Europe, the Central Bank reported that Digital Euro will be free to use and accessible to everyone, but lawmakers will decide which personal information the bank has access to. According to this, everyone will have access to the digital euro, but lawmakers will decide how the Central bank will access personal information. According to the statements of ECB Board Member Fabio Panetta:
It will then be up to you, the legislator, to strike the optimal balance between protecting privacy and achieving other important goals of a public nature.
The executive cites important public objectives such as combating money laundering, terrorist financing and tax evasion or any enforcement compliance. In addition, the researchers previously proposed a supervised brokerage approach for the digital euro, rather than the direct central bank model. In this context, the work of the central bank to examine the digital euro began in October 2021. The preliminary phase of the digital euro project is expected to be completed by 2023.
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