MiCA Becomes Law: What Changes for the Cryptocurrency Market?

MiCA is law: Here’s what it is, what it provides, and what changes for cryptocurrencies

Italy’s implementation of the Markets in Crypto-Assets Regulation, known as “MiCA,” has been officially published in the Official Gazette (GU 215) on September 13, 2024.
This aligns with EU Regulation 2023/1114, approved on April 20, 2023, by the European Parliament.
MiCA is part of a broader regulatory project that encompasses not only cryptocurrencies but the entire digital financial sector.
The goal is to foster innovation while ensuring consumer protection and financial stability across Europe.

What is MiCA?

MiCA serves as the European regulatory framework for crypto-assets, including prominent cryptocurrencies.
It specifically categorizes three types of crypto-assets: stablecoins, electronic money tokens, and other crypto-assets.
The term “crypto-assets” refers to any digital representation of value or rights that can be electronically transferred and stored, leveraging distributed ledger technology.

Objectives of MiCA

MiCA aims to support the development of the digital finance sector, enhancing innovation while minimizing risks and ensuring fair competition.
The need for regulatory clarity arises from the increasing prevalence of stablecoins, which could pose risks to financial stability if left unregulated.

Implications for Issuers

Issuers are classified under MiCA as providers of asset-referenced tokens (ART), e-money tokens (EMT), and other crypto-assets.
All issuers must publish a white paper detailing their projects.
For ART and EMT, stricter requirements are imposed to ensure compliance and transparency.

Regulatory Framework for CASP

MiCA introduces specific rules for crypto-asset service providers (CASP), mandating authorization for operations in the EU.
This ensures that all service providers adhere to strict operational and governance standards, enhancing consumer protection and market integrity.

Impact on Cryptocurrencies

Ultimately, MiCA establishes a regulated market for cryptocurrencies, enhancing consumer safety and market stability.
It equips issuers and providers with a clear legal framework, fostering growth and innovation across the sector.