Markets in Crypto-Assets

Markets in Crypto-Assets (MiCA) is a regulation in EU law. It is intended to help streamline distributed ledger technology (DLT) and virtual asset regulation in the European Union (EU) whilst protecting users and investors. MiCA was approved on 20 April 2023 by the EU Parliament and will become law in 2024.[1]

Title

The full name of the 24 September 2020 proposal is the "Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Markets in Crypto-assets, and amending Directive (EU) 2019/1937 COM/2020/593 final". MiCA is part of a Digital Finance Package that intends to transform the European economy in the coming decades.[2]

Function

MiCA provides legal certainty around crypto assets – cryptocurrencies, security tokens and stablecoins. It is similar to Europe’s Markets in Financial Instruments Directive (MiFID), which is a legal framework for securities markets, investment intermediaries and trading venues.[3] It is expected to be different from the UK crypto regulatory framework that has chosen to start by regulating only a few crypto assets, while EU through MiCA will impose a wider focus.[4]

History

Groundwork for MiCA started in 2018 due to increased public interest within the EU in cryptocurrencies. The European Commission adopted the digital finance package which included MiCA in September 2020, leading to extensive discussions among the preparatory bodies (the EU Council, the European Central Bank, the Economic and Social Committee).[5]

References
  1. "EU lawmakers approve world's first comprehensive framework for crypto regulation". cnbc.com. 20 April 2023. Retrieved 26 April 2023.
  2. "MiCA: A Guide to the EU's Proposed Markets in Crypto-Assets Regulation". sygna.io. 24 September 2020. Retrieved 9 June 2021.
  3. "New Crypto Rules in the European Union – Gateway for Mass Adoption, or Excessive Regulation?". Stanford. 12 January 2021. Retrieved 9 June 2021.
  4. "A divide has emerged in EU and UK crypto regulation". Financial Times. 31 August 2022. Retrieved 18 September 2022.
  5. "MiCA and the CySEC CASP regime in Cyprus". SALVUS Funds. 5 August 2022. Retrieved 18 September 2022.
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