MiCA: the European Securities and Markets Authority continues to build the cage for cryptos
Raphaël Wernert
2/1/24
The MiCA regulation, a key piece of legislation regulating cryptocurrencies in Europe, is getting closer to implementation. From June 2024, stablecoin issuers will have to comply with this regulation, followed in December by other PSANs. This complex framework, overseen by ESMA, aims to establish a strict regulatory environment for cryptocurrencies in the European Union.
ESMA (European Securities and Markets Authority) addresses the notion of "reverse solicitation", which allows EU clients to solicit services from crypto companies outside MiCA. This strict exception highlights the EU's effort to limit access to the European market for crypto players not regulated under MiCA, aiming to protect European investors.
ESMA is launching a consultation to clarify the classification of crypto-assets, confronting PSANs with the complexity of determining whether certain crypto-assets should be treated as "financial instruments" under MiFID II. This regulatory uncertainty represents a major challenge for PSANs as they navigate between the MiCA and MiFID II directives.
The cryptocurrency industry in Europe is on the cusp of a more structured regulatory era with the imminent implementation of MiCA. Market participants need to prepare for a strengthened regulatory framework, which could both secure the market and pose new challenges, including digital asset classification and regulatory compliance.
