The EU will become the frontrunner in crypto regulation. In a vote Thursday, the EU Parliament voted 517 in favor and 38 against passing the Markets in Crypto Act (MiCA). The legislation seeks to reduce risks for consumers buying crypto assets, which will mean providers can become liable if they lose investors’ assets. The rules will impose a number of requirements on crypto platforms, token issuers, and traders.

The European Securities and Markets Authority (ESMA) will be given powers to step in and ban or restrict crypto platforms if they are seen to not properly protect investors or threaten market integrity or financial stability.

Platforms will be required to inform consumers about the risks associated with their operations, while sales of new tokens will also come under regulation.

The so-called “travel rule”, already used in traditional finance, will in the future cover transfers of crypto assets. Information on the source of the asset and its beneficiary will have to “travel” with the transaction and be stored on both sides of the transfer.

Stablecoins like Tether and Circle’s USDC will be required to maintain ample reserves to meet redemption requests in the event of mass withdrawals. Stablecoins that become too large are also limited to 200 million euros ($220 million) in daily transactions.

MiCA also addresses environmental concerns surrounding crypto, with firms forced to disclose their energy consumption and the impact of digital assets on the environment.