The MiCA Proposal: Why is it important?
On the 30th June 2022, the European Council and the European Parliament announced that a provisional agreement was reached on a proposal for a Market in Crypto-Assets (“MiCA”) Regulation. The MiCA proposal covers issuers of unbacked crypto-assets, stable-coins, trading venues, and wallets where crypto-assets are held. For the first time, with this development the European Union (“EU”) will be bringing crypto-assets, crypto-asset issuers, and crypto-asset service providers under an all-encompassing regulatory framework. Although at a national level some Member States already had national legislations for crypto-assets in place (including Malta), MiCA will be the first specific regulatory framework at an EU level.
The ever-evolving nature of the crypto-asset sector confirmed the need for an EU legislative intervention for better consumer protection and the prevention crypto-assets misuse. Indeed, the MiCA proposal states that:
The lack of an overall Union framework for crypto-assets can lead to a lack of users’ confidence in those assets, which will hinder the development of a market in those assets… [a] dedicated and harmonised framework is therefore necessary at Union level to provide specific rules for crypto-assets and related activities and services, and to clarify the applicable legal framework.
As stated by the French Minister for the Economy, Finance and Industrial and Digital Sovereignty, Bruno Le Maire, the MiCA Regulation will put an end to the ‘crypto wild west’. The discussion over the MiCA proposal has been ongoing for the past two years, following the European Commission’s adoption of a package of proposed legislative measures in September 2020, aiming to create a framework for the regulation of crypto-assets within the EU. This framework includes the proposed MiCA Regulation, together with a proposed Digital Operational Resilience (“DORA”) Regulation, a proposed Pilot Regime for Market Infrastructures based on Distributed Ledger Technology (“DLT”) Regulation, and a proposed Directive to amend other directives.
The provisional agreement reached on the 30th of June 2022 is subject to approval by the European Council and the European Parliament, before passing through the formal adoption procedure. If and once it is adopted, the MiCA Regulation will be directly applicable to all EU Member States, without the requirement of national implementation.
We invite you to contact us for further information on the MiCA Proposal.