MiCA: Markets in Crypto-Assets Regulation

The regulation on Markets in Crypto-Assets (MiCA) sets out a European framework. The aim of the framework is to provide legal certainty and foster innovation in the European Union (EU). MiCA covers crypto-asset issuers, crypto asset service providers and crypto-assets in the same regulatory framework.

What is the MiCA regulation?

The European regulation on Markets in Crypto-Assets (known as "MiCA") is part of a set of measures on digital finance in Europe (the Digital Finance Package). It aims to regulate crypto-assets not covered by the regulations on existing financial instruments by creating a dedicated European regulatory framework. The objective is to regulate the risks associated with crypto-assets by better protecting investors in these assets by preventing the misuse of crypto-assets, while promoting innovation in the EU.

This regulation on new digital assets covers several areas, including:

• Public offerings and the admission to trading of tokens with or without reference to an asset (e.g. crypto currencies (for example Bitcoin or Ether), utility tokens, e-money tokens, asset-referenced tokens);

• The provision of services on crypto-assets by service providers;

• The prevention of abuse on the crypto-assets market.

MiCA introduces:

• A uniform legal framework in the EU for crypto-asset markets;

• The tracking of crypto-asset transactions similar to that of traditional money transfers;

• Increased investor protection.

MiCA replaces the few existing national frameworks, including the one implemented in France by the PACTE law of 22 May 2019, which introduced a specific regime for initial coin offerings (ICOs) and digital asset service providers (DASPs). Crypto-asset service providers registered as DASPs in France with the Autorité des Marchés Financiers have 18 months to meet the new MiCA authorisation requirements.  This authorisation is mandatory for crypto-asset service providers (CASPs).

Providers authorised under MiCA will be able to benefit from the European passport and provide their services in all EU countries. Service providers will be required to report on their environmental and climate footprint.

What is the timetable for the MiCA regulation?

The European MiCA regulation was published on 9 June 2023 in the Official Journal of the European Union. It entered into force 20 days later, but the deadline for the application of its legislative provisions is 30 December 2024. Some provisions, mainly those relating to stable coins, come into force earlier, i.e. 30 June 2024.