MiCA, EU law of cryptocurrency market was put into consideration in the EuroParliament in March 2022, and as result, the amendment to limit PoW-based crypto assets, which would have efficiently resulted in a ban on Bitcoin, has obtained a rejection. Read on to find out what is the purpose and scope of MiCA regulation and how it will change the operation with cryptocurrencies.
Overview of new law
The suggested legislation belongs to the digital economy program that also encompasses a proposal for a test-version system for marketplace infrastructure grounded on DLT. This rule was adopted by the EuroParliament and is due to enter force by the end of 2022. The EuroCommission has been working on the number of variants for supervising the crypto industry. At the end of the day, it did decide on the option of a full harmonized structure within the EU of the regulations enforceable to issuers and CASPs, with an EU passportization system. For stablecoin tokens, the EuroCommission has designed separate legal and regulative mechanisms alongside oversight under the law on e-funds.
Purpose and scope of the law
The primary aim of this new regulative system is to set up rules regarding:
- Revelation structures for issuing and operating digital assets.
- The authorization and control of CASPs, asset-backed and e-funds token issuers.
- The operation, management, and oversight of asset-backed and e-funds token issuers, and CASPs.
- Implementation of client protection laws for operating with digital assets.
- Appropriate steps to avoid market manipulations aim to guarantee the proper operation of digital asset marketplaces.
Who does not fall under the remits of MiCA?
The new supervisory regime refers to EU-based individuals who conducts issuing cryptocoins or deliver services related to cryptocoins. Hence, MiCA does not cover:
- E-assets that are deemed as financial tools or e-funds excluding the case where the e-funds is run as e-funds tokens under the law.
- Some individuals and legal entities, such as the ECB and the central banking institutions of the EU countries, insurance companies, liquidators or administrators operating in formal measures taken to deal with company debt, individuals delivering crypto services solely for their consolidation group, their branches, or other subordinate companies, the EIB, and organizations formed by states, governments or other international organizations. In accordance with the law, approved credit unions and investment companies will only be liable to some clauses of the MiCA or will have the rules of law supervising them amended.
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