Approval of MiCA Regulations
On April 20, the European Parliament (EP) approved the MiCA Regulation. This is a major breakthrough for society, as it offers legal certainty and provides the necessary legislative framework for operating in the cryptoasset market.
The Regulation, part of a larger whole
The MiCA Regulation is part of the European Union’s Digital Finance Package, published in 2020. This package included several legal texts aimed at regulating cryptoassets and defining a competitive strategy for the Union’s financial system. The texts included are:
- DORA Regulation (approved in September 2021).
- Pilot Regime Regulations (approved in July 2022).
- MiCA Regulations. (approved in April 2023).
Challenges and Future
The introduction of the regulation poses new challenges that have yet to be resolved. Some already suggest the need for a “MiCA 2” due to the rapid advancement of technology. The drafting of the regulation should be collaborative, involving both the European legislator and industry players.
Opportunity for Europe
With the current international context, especially in the United States, specific regulation in Europe offers a great opportunity to attract companies in the crypto sector. The actions of the Securities and Exchange Commission (SEC) are leading large players in the sector to consider relocating to Europe.
Adaptation in Spain
Spain has been a pioneer in adapting the Pilot Regime Regulation to its national legislation. The Securities Market and Investment Services Law now includes a definition of cryptoasset. This law incorporates security tokens, represented by distributed log technology, into Spanish law.
MiCA’s approach
The MiCA Regulation focuses on stablecoins, utility tokens and e-money tokens. Central Bank Digital Currency (CBDC), controlled by a central bank, are outside the scope of MiCA and will have their own regulation. This is because there is still a long way to go to set up a digital euro.
As for NFTs, MiCA does not mention them directly. Although the regulation does not refer to these cryptoassets specifically, the definition of cryptoassets in MiCA could include them as representations of value or rights. This suggests that NFTs could be subject to MiCA, especially with regard to the right of disclosure for investors.
Application and Deadlines
Stablecoins: MiCA will first apply to stablecoins from July 2024, only 12 months after the approval of the text. The EU seeks to regulate these assets due to their popularity and the risk they pose to the digital euro. The European Central Bank has already expressed concerns about the impact of stablecoins on the adoption of the digital euro.
Other Aspects: The other aspects of the regulation will be applicable as of January 2025. However, those interested in operating in the cryptoasset market should start adhering to the regulation as of now.
Conclusion
It is essential to understand the legal context of cryptoassets, both for investors and for those developing projects in this field. Specific regulation eliminates the chaotic environment of the crypto bubble and reinforces Europe’s position as a leader in this field.
At The Lighthouse Team, we are committed to cryptoasset advisory. Our team is always informed and up to date. Contact us through our website for more information.
