Published by the Council of the European Union on June, 2nd 2023, the MiCA Regulation1 on the cryptoasset market was published in the Official Journal of European Union (“OJEU”) and then come into force within the single market.
Expected by some players who have chosen to anticipate certain rules of this regulation, and dreaded by others who fear that it will intensify non-European competitive pressure, the MiCA Regulation should mark a turning point in the development of the cryptoasset market and its service providers.
Stemming from the "digital finance package" published by the European Commission in September 2020, the MiCA Regulation introduces a series of measures for issuers of crypto assets that do not qualify as financial instruments, and for providers who supply services on crypto assets within the European Union.
The MiCA Regulation thus introduces a regime applicable to issuers of crypto assets, distinguishing utility tokens from stablecoins, for which the Regulation splits it into two categories (e-Money tokens and asset-referenced tokens). It also introduces specific rules for so-called "significant" stablecoins which, given their volume of issuance and the impact they could have on the market, are subject to stricter requirements.
With regard to crypto asset service providers ("CASPs"), the MiCA Regulation recognises 10 services that will be subject to common and specific obligations depending on their nature. The principle of mandatory authorisation obtained from their national competent authority will enable CASPs to be allowed to provide services (European passport) within the 27 Member States.
Lastly, for crypto assets admitted to trading on a platform or for which an application for admission has been made, the MiCA Regulation organises the prevention and repression of market abuse.
Some issues relating to the cryptoasset market still need to be addressed and clarified. This is particularly the case for non-fungible tokens ("NFT"2) and decentralised finance activities ("DEFI"). Insofar as the MiCA Regulation does not apply to crypto-assets that are unique and non-fungible with other crypto-assets (including digital art or digital collections), a large number of NFTs remain excluded from the scope of MiCA Regulation. Similarly, the European legislator preferred to give the National authorities time to observe developments in DEFI before specifying, probably in another sequence, the rules applicable to these alternative services to centralised finance.
A number of important provisions will also be specified in Level 2 texts (regulatory technical standards, guidelines, etc.) currently being prepared by the European banking and market supervisory authorities (EBA3 and ESMA4).
Following its publication today in the Official Journal of the European Union, the Regulation will enter into force in 20 days. Its entry into force will be gradual and segmented, no more than 18 months after the date of entry into force.
Gide is pleased to invite you to its conference "How to prepare for the MiCA Regulation? Expectations of supervisors and practices of actors", on June 29th 2023 from 9am to 10.30am, in the presence notably of ESMA.
To register, please follow the link here.
1Markets in crytpo assets
2Non fungible tokens
3Autorité bancaire européenne
4Autorité européenne des marchés financiers (ESMA)