European Parliament Endorses the New Markets in Crypto-Assets Regulation (MiCA) by adopting the crypto-focused MiCA legislation
With the new crypto-focused legal framework MiCA, European policymakers intend to set standard regulations and establish harmonized rules for crypto assets at the EU level, thereby offering legal certainty for the crypto industry and investors. The MiCA regulation will set guidelines for the operation, structure and governance of issuers of digital asset tokens. It will also provide rules on transparency and disclosure requirements for issuing and trading crypto.
MiCA legislation covers activities involving “crypto-assets,” which are described as “digital representation of value or rights which may be transferred and stored electronically, using DLT (or similar technology).”
MiCA identifies and regulates three types of crypto-assets that are subject to different requirements:
- Asset-referenced tokens (ARTs) are a type of crypto-asset that state to maintain a stable value by referring to the value of several fiat currencies that are legal tender
- Electronic money tokens or e-money tokens (EMTs) are a type of crypto-asset that imply to exchange and uphold a stable value by referring to the value of a fiat currency that is legal tender
- Other crypto-assets not covered by existing EU law, as a catch-all category, are not EMTs or ARTs
In the current crypto-business environment, ARTs and EMTs could be assimilated to “stablecoins.”
Under the MiCA legislation, supplementary requirements are applicable to issuers of significant EMTs. In this respect, ARTs, and EMTs may be qualified as significant by the European Banking Authority (“EBA”) based on a set of criteria, such as the size of the customer base, the ARTs’ value or market capitalization, or the number of transactions.
The particular provisions of MiCA concerning stablecoins will probably come into force in July 2024, while others, including those on crypto assets service providers, will apply in January 2025.
For further information, please read the following:
European Parliament Endorses the New Markets in Crypto-Assets Regulation (MiCA) (winston.com)
MiCA – Markets in Crypto-Assets regulation memo (cib.bnpparibas)
Markets in Crypto-Assets regulation – Timeline and Key Sources:
24 September 2020 – EU Commission Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Markets in Crypto-assets:
EUR-Lex – 52020PC0593 – EN – EUR-Lex (europa.eu)
19 February 2021 – Opinion of the European Central Bank on a proposal for a regulation on Markets in Crypto-assets:
EUR-Lex – 52021AB0004 – EN – EUR-Lex (europa.eu)
24 February 2021 – European Economic and Social Committee opinion:
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020AE4982&rid=1
24 June 2021 – European Data Protection Supervisor opinion:
20 April 2023 – Plenary vote in the European Parliament:
Texts adopted – Markets in Crypto-assets (MiCa) – Thursday, 20 April 2023 (europa.eu)