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EU could emerge as unlikely crypto saviour as new legislation brings ‘net positive’

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Bitcoin is toiling at its lowest value in years, having held below the $20,000 resistance level for weeks. The coin is currently worth $19,026.38 and down 0.90 percent in the last 24 hours, according to Coinbase. Investors are urgently hoping their fortunes could soon change, and those living in the EU may be in luck.

The bloc’s legislators have proposed laws that would help streamline Distributed Ledger Technology (DLT) and regulate virtual assets in the union.

Many people invested in cryptocurrencies will likely have regarded the proposals as negative, having long-touted the market’s regulation-light landscape as a reason for their participation.

The EU’s work has culminated in a Markets in Crypto Assets (MiCA) proposal that seeks to challenge cryptocurrency firms to prevent money laundering and other illicit activities.

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Part of the MiCA proposal would see the bloc clamp down on wallets held by individuals outside of management from officially licensed firms.

READ MORE: Cryptocurrency prices: Will crypto recover, will Bitcoin go back up?

MiCA would also help the EU halt stablecoin issuance for large-scale payments if passed.

According to Marcus Sotiriou, an analyst at UK-based digital asset broker GlobalBlock, the EU would become the “first major jurisdiction to implement a comprehensive regulatory framework for crypto”.

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The rules, he added, would “set global standards and affect regulations globally”, even going as far as to impact the US.

While many people won’t welcome this, Mr Sotiriou said the rules would create a “net positive” for the EU cryptocurrency industry.

He added: “MiCA includes aspects which many will be aggrieved about, including the ‘unhosted wallet’ rule.

“But in my opinion, the rules are a net positive development for the crypto industry within the EU.

“Aside from the added clarity that many businesses and financial institutions have been waiting for, I think the most pleasing aspect was that the Proof-of-Work ban (introduced because of its environmental impact) has been taken off the table.

“This demonstrates how policymakers have listened to those fighting back against the proposed rules, and recognition of a concerted effort towards a sustainable future for Proof-of-Work mining.”

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That calculation came from Chainalysis, which found June’s performance was only slightly better than May’s.

NFT sales hit an all-time low that month, reaching just $648 million as the furore appeared to die down.

Anything that helps cryptocurrencies could eventually help NFTs as well, as, according to Chainalysis economist Ethan McMahon, the decline is “definitely linked to the broader slowdown in crypto markets”.

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Mr McMahon added: “Times like this inevitably lead to consolidation within the affected markets, and for NFTs, we will likely see a pullback in terms of the collections and types of NFTs that reach prominence.”

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