EU Regulator To Launch MiCA Consultation Starting July

EU Regulator To Launch MiCA Consultation Starting July – Here’s Why

Updated: 18 June 2023

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The European Securities and Markets Authority will propose how the EU’s new Markets in Crypto Assets (MiCA) rules should work in practice next month. This includes forms, notifications, and established funds that crypto companies must follow to offer services within the bloc.

Further, the European Union’s (EU) financial watchdog will launch a three-part consultation process for the recently adopted Markets in Crypto-Assets framework. In a notice posted on the European Securities and Markets Authority (ESMA) website on June 12, regulators noted that the consultation packages would cover authorization, governance, conflicts of interest, and procedures of complaint management of MiCA, commencing July 2023.

🚀 #MiCA enters into force at the end of June.

🗓️ To begin implementation, #ESMA with relevant stakeholders will launch 3⃣ public consultations in July, October & Q1 2024 → https://t.co/AvePQSapZp.

🔜 Details on the duration of each public comment period. pic.twitter.com/QFlERttwxR

— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) June 12, 2023

The measures will be subject to approval by the European Commission, the European Parliament, and the European Council.

The first consultation package will include technical standards on the application of crypto service providers in the EU, procedures for handling complaints, and disclosing potential conflicts of interest. Additionally, the second tranche of consultations, set to roll out in October, will consider disclosure of information to investors, governance requirements for crypto companies, and “sustainability indicators and adverse impacts on the climate.”

ESMA’s final consultation, expected in the first quarter of 2024, may consider the protection of investors and the rules to counter market abuse. The MiCA structure suggests a timetable of around 18 months to come to completion, with all the set standards starting in December 2024.

Markets in Crypto Assets (MiCA)

After the first proposal by the European Commission in September 2020, the Council of Economic and Financial Affairs of the European Union gave the green light to the highly anticipated MiCA in a May 2023 vote. The finance ministers from 27 member states voted in favor of the MiCA bill and amendments to several regulations and directives relating to the new legislation.

Nevertheless, two more pieces of legislation, including regulation on information accompanying transfers of funds and certain crypto assets, were also adopted by the European Parliament in conjunction with MiCA’s adoption.

ESMA further said the framework had “entered into force” in June. Still, regulators and lawmakers are moving through proposals to ensure a smooth implementation of crypto-centric legislation.

What Will a Crypto-Regulated Europe Look Like?

The MiCA regulations are comprehensive and cover several aspects of the ecosystem. This includes stablecoin issuance and crypto business disclosures. The global crypto community has paved the way for these laws, despite including the controversial “Travel rule,” which will force crypto exchanges to disclose information on all users sending more than €1000.

Europe will notably be trend-setting globally in what it means to have tailored crypto regulations. There will be added restrictions for users. However, most protections are not in the general ‘Wild West’ crypto ecosystem.

Furthermore, there will be absolute clarity on how to remain compliant for crypto businesses, which has been unavailable in the US crypto market.

At a time when crypto industry enthusiasts are considering in which jurisdiction to conduct business, the regulatory clarity of digital assets, is at the forefront of discussions.

MiCA seeks to create a consistent regulatory framework for crypto among EU member states. If the regulations succeed, they will offer a blueprint for other nations to bring this digital asset space into a regulated realm.