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Author: Romain Swertvaeger, Clément Robert; Compilation: TAXDAO
This summer, the first part of the EU MICA regulations will officially take effect.Financial institutions (FIS), which are currently being engaged in or exploring crypto assets, will require business adjustments.What specific actions are needed, how will this affect EU encryption customers?
In June 2024, the European Union will begin some terms of MICA. The first thing that pays attention to is the asset reference tokens (ART) and the electronic currency tokens (EMT).In the process, the European Union provided a framework for providing customers with new digital products and services to customers.This progress is of great significance because it integrates encrypted assets into mainstream financial services and creates a legal framework for the operation, providing and distribution of these products.Understanding the operation of these new assets is essential to build its own products around the predicted market for credit institutions to predict the market.
1.The evolution of financial value storage and transaction methods
Digital tokens combine the stability of traditional financial instruments with the flexibility of digital assets. Art and EMT represent the evolution of value storage and transaction methods.ART, usually called “stable currency”, maintains its value through a basket of basic flow assets, is an ideal savings or paying digital currency.This is not only suitable for financial assets such as currency and encryption assets, but also can be applied to large metals such as gold, provided that the value of ART can be stable.
On the other hand, EMT is usually called “electronic currency tokens”, which is equivalent to the online equivalent of legal currency (traditional currency supported by the government, such as the US dollar or euro), and promises to simplify electronic payment. At the same time, it provides traditional currencyShould be safe and reliable.Such tokens are similar to traditional electronic currencies, such as “Electronic Currency instructions 2” (EMD2) and the upcoming PSD3/PSR payment package.In fact, Mica even stipulates that EMT will comply with the same issuance and exchange requirements as traditional electronic currencies.The difference between EMT is its implementation and distribution method, which can realize different use cases from traditional electronic currency.This is also applicable to ART, because it is the use of the active behavior and innovative technologies that these two tokens have opened up a new way to develop existing financial services.
2.Realize cross -border real -time payment
Fast cross -border transactions are a hot topic in the financial industry.At the EU level, the recently launched “Instant Payment Regulations” (IPR) will require the European Economic Zone Bank to provide cross -border real -time payment with the currency of the euro or member state.At the global level, some private initiatives are also launching some private initiatives between the RT1 Instant1 and U.S./British Clearance Office of the European Banking Administration (EBA) to achieve the international interoperability of real -time payment.However, digital tokens do not need to rely on the established liquidation and existing rules, and cross -border real -time payment can be achieved by default.The number of intermediaries involved in the value chain is very small, which also reduces the cost of each transaction of banks and customers.
3.Realize value -added through convenience and reduce the risk of transaction opponents
Because the tokens use blockchain technology, customers can benefit from value -added functions such as smart contracts.Such functions can include setting up the “Cash on Payment” arrangement (the smart contract will retain some of the customer’s funds and automatically pay when the customer receives the goods).These new use cases are not only convenient for customers to pay when receiving the goods, but also restrict the risk of transaction in business relations and reduce friction and delay in transaction processing.
4.Campaign to pay fraud and enhance financial security
Due to the inherent structure and methods behind the distributed ledger technology (DLT), the use of blockchain technology also brings various other benefits to the financial industry.In these high -encrypted systems, the transaction is recorded in a safe and unchanged classification account. Only a few authorized network members can access it.In such systems, transactions are highly traceable, and many collaborative authenticants jointly ensure data integrity, and can ensure that the transactions in the blockchain are legally and authorized.Such measures have reduced the risk of unauthorized access and fraud operations, and this is the key issue in the payment field.
5.Market example of early entryrs
For example, some fintech companies provide EMT with currencies such as US dollars and euros.These EMTs are linked to the legal currency prices they represent, but they bring digital flexibility and advantages to the use of these legal currencies.This includes the ability to combine euro EMT with the function of blockchain and smart contracts, which can further support many complex financial transactions and use cases.These include automatic and impartially handling and executing financial agreements based on code to achieve nearly real -time international payment settlement.
In addition, financial institutions can also be traded without issuing tokens.Some entities that have been licensed have provided customers with access to large cryptocurrency trading platforms, allowing investors to easily access more diverse products.
6.Preparation in June 2024
Financial institutions seeking to enrich their existing services should explore the possibility of providing such services and the ability to improve customers with higher complexity services.Mica’s regulations on ART and EMT have been applied since June 2024, and the complete law rules are applicable from December 2024.Therefore, financial institutions within the scope should prepare permits to apply for token issuance or transactions, draft detailed crypto asset white paper for their products, and contact the State Administration (NCA) to discuss their intention to start or continue to operate.At the same time, please keep in mind that the remaining requirements will be applied eight months later.
In particular, the white paper of crypto assets constitutes an important part of the financial institution that provides the ART or EMT approval process.Although the white paper requirements of different tokens are different, financial institutions must disclose the operating mechanism behind ART and EMT, such as the issuance and redemption process, the rights and obligations of the token holders, measures to protect assets, and the measures to protect assets.It also reports its own governance structure and control measures related to expected encrypted asset service products.In addition to these factors, they must also disclose the detailed information of the token type, such as the basic assets behind ART and how ART values are referred to these assets.
7.Looking forward to December and after 2024
Although not as exciting as Christmas, financial institutions should also expect all the terms of MICA regulations to take effect in December this year.In particular, this will introduce the scope of law applicable to the “encrypted asset service provider” (CASP) permit.Although the authorized credit institutions, investment companies, AIFM and other established entities do not require separate licenses when providing encrypted asset services, this license clause will allow more types of companies to provide crypto assets in more types of financial institutions except for pre -authorized financial institutions.Serve.This may lead to intensified competition in providing such tokens and peripheral services, and financial institutions can enter these fields in advance from July.
In addition, a number of regulatory and compliance requirements will be introduced since then. The entities that hope to provide encrypted asset services can effectively monitor and prevent insider trading, market manipulation and market abuse to ensure that they provide adequate protection measures for customers, and clearly follow the application.For their appropriate disclosure requirements.
