The world’s first comprehensive framework for crypto regulation has been approved by lawmakers in the EU.

The European Parliament has passed a comprehensive set of regulations aimed at the cryptocurrency industry, making it the first of its kind in the world. The legislation, known as the Markets in Crypto Act or MiCA, aims to reduce risks for consumers purchasing crypto assets by holding providers liable for any loss of investors’ crypto-assets. It also imposes requirements on crypto platforms, token issuers, and traders around transparency, disclosure, authorization, and supervision of transactions. In addition, MiCA addresses environmental concerns, requiring firms to disclose their energy consumption and the impact of digital assets on the environment.

Stablecoins like tether and Circle’s USDC will also be subject to regulation, and will be required to maintain ample reserves to meet redemption requests in the event of mass withdrawals. Stablecoins that become too large may also be limited to 200 million euros ($220 million) in transactions per day. 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.

In a separate move, the EU Parliament also passed the Transfer of Funds regulation, which aims to reduce anonymity involved in transfers of cryptocurrencies like bitcoin and stablecoins. This applies the “travel rule,” which requires financial companies to screen, record, and communicate information on both sender and recipient, to crypto transactions to help combat money laundering.

The move puts the EU ahead of the US and UK, which are yet to bring in formal rules for the crypto space. Once the EU laws come into effect, crypto companies will be able to use their licenses in one European country to “passport” their services across various member states. Coinbase and Kraken have recently obtained virtual asset service provider licenses in Dublin, while Ripple is seeking a license from the Irish central bank.

The passing of MiCA has been hailed as an “important milestone for the crypto industry around the world” by Andrew Whitworth, EMEA policy director for blockchain firm Ripple. However, concerns remain about the proportionate application of the legislation to different companies’ crypto offerings, based on the risk profiles of their activities.

Regulators have been seeking to rein in the crypto market in the wake of numerous catastrophic industry failures. The move by the EU to regulate the industry may encourage other countries to follow suit, as the cryptocurrency market continues to grow in popularity.