In the Making: First EU Regulation on Cryptoassets
By Małgorzata Kociszewska, Penteris
On 24 September 2020, the European Commission published the proposed “Regulation on Markets in Cryptoassets” (the “MiCA Proposal”).
1. What is MiCA?
MiCA is a part of a digital finance resolution package that will fill a gap in EU regulations in relation to cryptoassets. In its simplest terms, MiCA is built on existing EU cryptocurrency and financial market resolutions in order to introduce cryptoassets into the legal regime and to address the degree of proportionality, in other words, what are the minimum actions that the EU must take in order to achieve the aim of full cryptoasset regulation.
2. What will MiCA regulate?
MiCA will apply to issuers of cryptoassets in or into Europe, in particular utility tokens, payment tokens, stablecoins (or asset-referenced tokens), and the newly defined e-money token (a type of cryptoasset whose main purpose is to be used as a means of exchange and purports to maintain a stable value by referencing the value of a fiat currency). MiCA will also regulate the provision of cryptoasset services such as the custody and administration of cryptoassets, the operation of trading platforms for cryptoassets or the exchange of cryptoassets for other cryptoassets or fiat currency.
3. When will MiCA take effect?
For now, MiCA is going through the legislative process in the EU, and its Member States can submit their comments on the draft. We can expect the final version to be adopted within 3 to 4 years. The question really is how greatly the cryptoasset market will change during this time, taking into account, for example, the incredible and rapid development of NFT (non-fungible tokens) in recent months. Additionally, even when MiCA comes into force, the transitional period will probably last up to 2 years for companies to adjust to the regulation.
4. Will all EU Member States have to implement MiCA?
MiCA is expected to be implemented as an EU regulation, which means it will apply directly in all EU Member States with no need for national implementation.
Małgorzata KociszewskaGGI member firm
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Małgorzata focuses on the legal aspects of new tech and digital solutions, advising everything from start-ups to well-recognized organizations. Her interests also include the regulated market, cryptocurrencies, gaming and gambling.
Published: June 2021 l Photo: insta_photos - stock.adobe.com