European Council adopts MiCA regulation – expected to come into force in 2024

The European Union Crypto Asset Market Regulation (MiCA) has been adopted by the European Council. MiCA still needs to be passed by the European Parliament for it to enter into force no earlier than 2024.

MiCA in the process of adoption by the European Union

This morning, the European Council approved the European Union Regulation on Crypto Asset Markets (MiCA). This is the final version.

In order for the MiCA regulation to be finally adopted in its current form, it still needs to be approved by the Committee on Economic Affairs of the European Parliament. Voting will take place on October 12. Regarding the sequence of events, Adan tells us the following:

“The MiCA regulation became the subject of a political agreement between various stakeholders in June 2022, so it is not surprising that the European Parliament must approve the text. Then, once the MiCA law has been translated by lawyers and linguists and published in the Official Journal of the European Union, the countdown to its application will begin. »

All provisions required by the MiCA rules will come into effect no earlier than January 2024.

Digital Asset Service Providers (PSAN and others) registered with the European Union regulator will have an additional 18 months to achieve compliance. Information that has not escaped some of the companies that have recently registered at a steady pace, especially in Italy.

The European passport will also see the light of day. This will allow, for example, a company registered with the Financial Markets Authority (AMF) to target clients from other European Union countries without having to take additional steps with national regulators.

At present, the topic of decentralized finance (DeFi) is still completely unclear. Institutions have yet to define what they consider to be truly “decentralized”. Depending on how this concept is evaluated, various DeFi entities (DAOs, protocols, etc.) will be affected or not.

MiCA regulation includes, among other things, considering non-fungible tokens (NFTs) as financial assets (under certain conditions), a complete ban on companies from rewarding their customers with stablecoin lending, the inclusion of algorithmic stablecoins in the rules, and much more. .

💡 Want to know more about what MiCA implementation will entail? Find our explanatory file on the latest measures added to this regulation.

We find the notion of significant CASP (Crypto Asset Service Provider). MiCA distinguishes between two types of CASPs, which are therefore crypto asset service providers. Classic CASPs and significant CASPs with over 15 million users per year.

Thus, significant CASPs will be regulated differently under the Anti-Money Laundering and Terrorist Financing Regulations (LCB-FT) and will be required to hold more capital.

We see this as a desire to protect European players from American or Asian giants. However, for more professional-oriented platforms, it would be better to focus on the volume of exchanges than on the number of users.

We thank Adan (Digital Asset Development Association) for answering our questions about MiCA.

MiCA regulation published by the European Council.

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