European Union states gave the final nod to the world's first comprehensive set of rules to regulate crypto assets on Tuesday, piling pressure on countries such as Britain and the United States to play catch up, reported Reuters.
An EU finance minister meeting in Brussels approved rules that were thrashed out with the European Parliament, which gave its approval in April. The rules are expected to be rolled out from 2024.
Regulating crypto has become more urgent for regulators after the collapse of crypto exchange FTX.
"Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” said Elisabeth Svantesson, finance minister for Sweden, which holds the EU presidency, Reuters reported.
The rules require firms that want to issue, trade and safeguard crypto assets, tokenized assets and stablecoins in the 27 country bloc to obtain a licence.
Ministers took steps to combat tax evasion and the use of crypto asset transfers for money laundering by making transactions easier to trace. They agreed on a requirement that from January 2026 service providers obtain the name of senders and beneficiaries in crypto assets, regardless of the amount being transferred.
There was also agreement on amending rules on how member countries cooperate with each other in taxation to cover transactions in crypto-assets, and on exchanging information on advance tax rulings for the wealthiest individuals.
Crypto firms say they want certainty in regulation, putting pressure on countries to copy the EU rules, and on regulators to come up with global norms for cross-border activity.