As of March 30, 2025, the European Union's regulatory stance on the cryptocurrency industry presents the following key directions and measures:
1. Strict regulation of stablecoins and acceleration of compliance processes
• The EU requires all member states to ensure that cryptocurrency asset service providers (CASPs) fully comply with stablecoin regulations by the end of the first quarter of 2025, including enhanced consumer protection and anti-money laundering measures.
• Privately issued stablecoins (especially those pegged to the US dollar) are seen as potential threats. The EU is responding by promoting the digital euro project, aiming to reduce dependence on foreign payment systems and provide an official digital currency alternative.
2. Controversies over Bitcoin mining and the PoW mechanism
• Although the European Commission planned to restrict energy-intensive Bitcoin mining after 2025, this proposal was rejected in March 2024. However, some member states may still limit mining activities through local legislation.
• Enterprises are prohibited from providing services directly related to proof-of-work (PoW) cryptocurrencies, but Bitcoin itself is not completely banned; its trading legality depends on specific member state policies.
3. Risk management of financial institutions holding crypto assets
• EU regulators impose a 100% capital requirement on financial institutions such as insurance companies, forcing them to fully cover the risks of their held cryptocurrency assets to prevent market volatility from causing systemic financial risks. This move is viewed as a key measure to curb excessive institutional participation in speculative crypto investments.
4. Full implementation of the MiCA regulation and market adaptation period
• The EU's Market in Crypto-Assets Regulation (MiCA) will come into effect on December 30, 2024, and by March 2025, it will have entered the implementation phase, requiring exchanges, wallet service providers, and other entities to complete licensing applications and compliance adjustments.
• The market expects potential regulatory confusion in the short term, especially regarding cross-border services and the adaptability challenges of existing business models.
5. Promotion of the digital euro and competition with cryptocurrencies
• The EU is accelerating the development of a central bank digital currency (CBDC) called the 'digital euro,' with the goal of achieving individual and business payment applications by 2025, directly competing with private cryptocurrencies (such as stablecoins) to weaken their market dominance.
Summary
The EU's policy framework in March 2025 reflects a 'combination of regulation and facilitation' approach: on one hand, tightening market risks through MiCA regulations and capital requirements to curb high energy consumption and speculative behavior; on the other hand, competing for digital currency discourse power with the digital euro to build a controllable crypto economic ecosystem. Future attention should be focused on the differences in policy execution among member states and the impact of industry compliance costs on market vitality.
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