The European Parliament gave its final approval to the Markets in Crypto-Assets Regulation (‘MiCA’) on 20 April 2023. The regulation forms part of the EU’s broader digital financial package whose aim is to encourage the use of fintech while ensuring consumer protection and financial stability across the EU.
MiCA is the first harmonised EU framework for regulating crypto-assets and is applicable across Member States without national transposition. The regulation introduces three sub-categories of crypto-assets, namely asset-referenced tokens, e-money tokens, and other crypto-assets, which includes utility tokens and other cryptocurrencies.
MiCA has three distinct regulatory regimes for issuers of stablecoins, non-stablecoins, and entities providing services in respect of crypto-assets (‘CASPs’). CASPs intending to provide crypto-asset services will require a seat in Europe and authorisation from the Member State’s national regulator. MiCA introduces 10 categories of crypto-asset services that require authorisation for CASPs.
The regulation has implications for other regulatory regimes like AIFMs, UCITS management companies, MiFID firms, credit institutions, and electronic money institutions, which undertake crypto-asset services.
The regulation will apply in two parts, with the first part dealing with stablecoins after 12 months and the second part dealing with CASPs after 18 months. The European Banking Authority and the European Securities Markets Authority will develop technical standards and guidelines to complement MiCA.
Our fintech team can assist with further regulatory guidance on MiCA.