The European Union (EU) on Thursday agreed on the details of a provisional deal to regulate the transaction of digital currencies, at a time when prices have plummeted and calls for stricter scrutiny of cryptocurrencies.

Negotiators have concluded agreement on a comprehensive package of rules that will regulate the transaction of digital currencies to apply to the 27 member states, known as Markets in Crypto Assets (MiCA).

"In the wild west of the cryptocurrency world, the MiCA will be a global standard-setter," Stefan Berger, the EU's lead legislator negotiating the rules, said in a statement quoted by Lusa.

EU rules on digital currencies "will ensure a harmonized market, provide legal certainty for crypto issuers, guarantee a level playing field for service providers, and ensure high standards of consumer protection," Berger added.

Like the EU's data privacy policy, which has become the global standard, and its recent landmark law targeting harmful content on digital platforms, regulations on cryptocurrencies are expected to influence the rest of the world.

The EU rules are "really the first comprehensive piece of digital currency regulation in the world," said Patrick Hansen, cryptocurrency risk advisor at Presight Capital, a venture capital fund.

"I think there will be many areas that will take a close look at how the EU has handled the issue," Hansen pointed out.

Under MiCA regulations, exchanges, brokers and other companies in the industry face strict rules designed to protect consumers.

The rules will help inexperienced digital currency investors avoid falling victim to fraud and scams that regulators warn are widespread in the industry.

Providers of 'bitcoin'-related services are subject to the regulations, but not 'bitcoin' itself, the world's most popular digital currency, which has lost more than 70 % of its value since it peaked last November.

Traders exempted NFT, non-fungible records, which have increased over the past year.

The EU noted that unlike digital currencies, digital goods, which can represent works of art, sports memorabilia or anything else that can be digitized, are unique and sold at a fixed price, but left room to reclassify them later as a 'crypto` asset under the MiCA or as a financial instrument.

The EU rules, which still require final approval, are to take effect by 2024 and include measures to prevent market manipulation, money laundering, terrorist financing and other criminal activities.