• MiCA, the Proof of Work (PoW) prohibition, and TFR relate to unhosted wallets.
• The two EU rules will be approved by the end of this month.
• There is still discussion over whether non-fungible tokens (NFTs) should be included in MiCA’s scope.

Two of the most important pieces of EU crypto legislation, with far-reaching repercussions for the crypto industry and the EU as a whole, are nearing completion.

MiCA, the Proof of Work (PoW) prohibition, and TFR, which relate to unhosted wallets, are the two EU rules that will be approved by the end of this month.

The three main EU institutions—the Council, Parliament, and Commission – will hold their final and concluding political trialogue meeting on the landmark MiCA bill.

Although practically all the main issues have been resolved, there is still discussion over whether non-fungible tokens (NFTs) should be included in the MiCA bill’s scope.

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On consumer protection grounds, the Council and Parliament were initially opposed to the Commission’s proposal to include them in the scope of MiCA, but appear to have accepted the plan for the time being.

The most likely outcome is a compromise in which NFT issuers are mainly exempted but organisations such as marketplaces that provide services on top of third-party NFTs are not. A last-minute expansion of MiCA’s scope will necessitate the application of these businesses for a CASP licence. Small volume platforms, on the other hand, may not be required to.

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The regulatory parties involved are hopeful that all negotiations for the two proposed regulations will be completed by the end. After that, the adopted compromise will be voted on officially by Parliament before MiCA goes into effect.