European Union lawmakers, the European Commission and member states agreed on a landmark law known as Markets in Crypto-Assets (MiCA) on Thursday which would see tighter regulations for cryptocurrency exchanges and stablecoins.

The law comes as the three main institutions are trying to hunt down money laundering in crypto.

Stablecoins like tether and USDC will now be required to maintain ample reserves that will allow them to meet redemption requests in the event of mass withdrawals (to escape another crypto crash like the one witnessed at the start of May). Stablecoins that become too large will be limited to 200 million euro transactions daily.

“MiCA is one of the more progressive initiatives to date and is focused on driving crypto innovation and adoption in the European region,” Tether’s chief technology officer, Paolo Ardoino, told CNBC.

The European Securities and Markets Authority (ESMA) will have enough power to ban or restrict crypto platforms if they are considered to be not properly protecting investors, threaten market integrity or financial stability.

Cryptocurrencies are facing their worst quarter in over a decade with bitcoin losing around 70% of its value and falling from its $60,000 highs in November 2021 to $19,500 in July 2022.

“Today, we put order in the Wild West of crypto assets and set clear rules for a harmonized market that will provide legal certainty for crypto asset issuers, guarantee equal rights for service providers and ensure high standards for consumers and investors,” the lawmaker who led negotiations on behalf of the European Parliament, Stefan Berger said.

The law is also set to address environmental concerns surrounding cryptocurrencies. Trading platforms will also have to warn consumers about the risk of losses associated with trading digital assets.

Non-fungible tokens (NFTs) were not affected by this law.

Note, cryptocurrency CFD trading is restricted in the UK for all retail clients.