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Author: FAISAL ZAIDI, Coindesk; Compilation: Songxue, Bit Chain Vision Realm
In the continuous development of blockchain and cryptocurrency world, a collaborative regulations and business development ecosystems are essential for promoting cooperation and innovation.In a company’s fragmented world in each operating country, it is more difficult to establish a decentralized economy.Recently, Crypto Oasis, Crypto Valley, DLT Science Foundation, and Inacta Ventures jointly launched the first global agreement to help the industry respond to increasingly complex regulations and agreement development worlds.
The following is an contribution and excerpt from the senior legal adviser of Alpinumlaw Law Firm, Timea Nagy, which involves the “Crypto Asset Market Supervision Law” (MICA).Member states realize the coordination and promotion of their products.
Examining the field of cryptocurrency, we found that there may be huge differences in regulations around the world, involving different regions, legal jurisdictions and management agencies.In order to establish a more integrated framework, the European Union (EU) took an important step and introduced the “Crypto Asset Market Supervision Law” (MICA).This measure may become a blueprint for other jurisdictions of the world.As of now, MICA is a symbol of the possibility of coordinating cryptocurrency regulations internationally.
Mica is not just an independent regulation; it is an important part of the comprehensive digital financial strategy formulated by the European Commission.This broader strategy covers all aspects, including the forthcoming digital operational tough regulations (DORA), which includes regulations suitable for encrypted asset service providers.Another noteworthy includes new regulations that focus on distributed ledger technology (DLT) pilot system, focusing on strengthening the operation of financial market infrastructure based on the DLT principle.
The regulations itself covers a wide range of scope, involving encrypted assets from unwavering to stable coins from the issuance, from an encrypted asset trading platform to storing their wallets and other aspects.It aims to provide an integrated regulations.The regulations define encrypted assets as numbers or rights that can be transferred and stored in electronic devices.They classify them into utility tokens, asset reference tokens and electronic tokens, and effectively include encrypted assets that are not currently supervised by the existing financial service regulations.
New regulations emphasize transparency, disclosure, authorization, and supervision, all of which have important influence.It is worth noting,Crypto asset service providers (CASP) need to be authorized from the competent authority to provide their services throughout the European Union.This authorization is essentially a passport they operate in the league.But what does this mean for Switzerland or other non -EU countries?
Switzerland and any other non -European countries are affected by MICA as long as they provide encryption -related businesses in EU countries.This means that Swiss companies need to analyze whether they comply with MICA’s regulations; if they meet, whether they have necessary permits.
MICA is generally suitable for three types of people: (i) the issuer of encryption assets, (ii) crypto asset service provider (CASP), and (iii) any encrypted asset transaction operating an encrypted asset service provider involved in transactions that have been authorized by transactionsThe behavior of encrypted assets traded on the platform, or the request of transaction on this trading platform.In addition, MICA distinguishes different types of encryption assets:
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Asset reference tokens:One is not an electronic currency tokens, which maintains stable value by referring to other values, rights or their combinations (including one or more official currencies).
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Electronic currency tokens:A encrypted asset that maintains stable value by reference to the value of an official currency.
Practical tokens.It refers to encrypted assets that are only used to provide products or services provided by its issuers.Please note!In addition to the range of MICA, it includes: DEFI protocol, pure NFT, CBDC, security tokens, or other encrypted assets that meet the conditions of financial instruments according to Mifid II.
license.MICA introduced license requirements for encrypted asset service providers, asset reference tokens, and electronic currency token issuers.Overall, CASP will trigger licenses, unless they are already a credit institution obtained by Mifid.As mentioned earlier, even if there is an existing license, the company still needs to inform the relevant authorities to inform them of the intention of providing crypto asset services.
Supervision.At the level of member states, the competent authority will be responsible for supervising CASP and ensuring that they comply with the provisions of MICA.CASPs with more than 10 million active users will be classified as “important CASP”.Although these important CASPs will continue to be supervised by relevant competent authorities, the European Securities and Market Administration (ESMA) will be given “intervention.”The permissions give ESMA measures to prohibit or restrict CASP with encrypted asset services, especially when the existence of market integrity, investor protection or financial stability constitutes a threat.
For stablecoins, the regulatory field involves the intervention of the European Banking Administration (EBA).Specifically, a stable coin with more than 10 million users or asset reserves exceeds 5 billion euros will be supervised by EBA.In addition, the European Central Bank will have the power to exercise veto to affect the operation of any stable currency in which it considers it.
Market abuse restrictions.The crypto assets that do not meet the qualifications of financial instruments under Mifid II will not be within the scope of the European Union market abuse of laws and regulations.However, MICA has formulated its own market abuse rules for the encryption asset market to ensure market integrity.These rules will be applied to encrypted assets traded on the encrypted asset trading platform operated by an authorized crypto asset service provider.
in conclusion
There is no doubt that Mica’s influence on CASP will be huge.This means that we may face the extension of necessary changes and potential difficulties.Although there may be some obstacles ahead, we are optimistic, because we are ready to respond to these challenges from a practical and legal perspective.
