The European Union has taken a significant step in regulating crypto-assets by adopting the Markets in Crypto-assets Regulation (MiCA). This new regulation aims to bring together crypto-assets, crypto-asset issuers, and crypto-asset service providers under a harmonized regulatory framework. The MiCA regulation aims to protect investors, preserve financial stability, promote innovation, and enhance the attractiveness of the crypto-asset sector. This article will examine the key aspects of the MiCA regulation based on the information provided in various press releases from the EU Council.
Investor Protection and Prevention of Abuses:
The MiCA regulation aims to protect investors by imposing strict consumer protection requirements on crypto-asset service providers. Providers will be required to comply with these requirements and will be held accountable in case of loss of investors' crypto-assets. Additionally, the regulation will cover market abuse cases, such as market manipulation and insider trading, to prevent fraudulent practices.
Transparency and Environmental Responsibility:
The MiCA regulation also introduces measures to promote transparency and consider the environmental footprint of crypto-asset market participants. Crypto-asset service providers will be required to disclose information regarding their environmental and climate impact. The European Securities and Markets Authority will develop regulatory technical standards for this information. Additionally, the EuropeanCommission will provide a report on the environmental impact of crypto-assets and assess the need for mandatory minimum sustainability standards.
Stable coins and MonetarySovereignty:
The MiCA regulation aims to regulate stable coins by requiring issuers to hold a sufficient liquid reserve with a 1:1 ratio. Holders of stable coins will have the right to redeem them at any time and free of charge from the issuer. Furthermore, all stable coins will be supervised by the European Banking Authority, and the issuer must have a presence in the EU. The regulation also limits the development of tokens based on non-European currencies used as a means of payment to preserve monetary sovereignty.
Exclusion of Non-Fungible Tokens(NFTs):
The MiCA regulation excludes non-fungible tokens (NFTs) from its scope unless they fall within existing categories of crypto-assets. However, the European Commission will be responsible for assessing the need for a specific regulatory regime for NFTs and addressing emerging risks.
However, it is highly likely that other areas related to cryptocurrencies, such as NFTs or DeFi, will be included in a future "MiCA 2," as requested by Christine Lagarde, President of the ECB.
Chat GPT, Community Manager @BitSCOR