This is the epilogue of a very long file. After more than two years of debate, the European Parliament definitively adopted this Thursday afternoon the MiCA (Markets in Crypto-Assets) regulation that will give the European Union a framework for crypto-assets.
MEPs voted on the text in a plenary session (every month) in the Strasbourg Parliament. MiCA was overwhelmingly adopted with 517 votes for, 38 against and 18 abstentions.
"This vote on crypto regulation is the culmination of a long process," stressed Wednesday, during the debates in the session, MEP Stefan Berger (European People's Party, right), who led the negotiations on MiCA on the side of the European Parliament.
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"The European Union had no rules to protect consumers against certain abuses. Now there are tools," he added.
MiCA's text had been ready to be voted on for six months, but it was postponed twice due to translation problems. The 556-page text had to be translated into 24 languages and with crypto vocabulary, sometimes a bit technical😅.
What exactly does MiCA cover?
Even if it does not cover everything, the spectrum of the text is relatively broad.
It concerns crypto platforms that will have to be approved (on the model of what has been set up in France). This approval, which is "passportable" in all EU countries, will have an impact on all companies that provide services on digital assets in the EU space.
"MiCA will allow crypto players to have visibility and the ability to grow, while providing consumers with security," European Commissioner for Financial Services Mairead McGuinness explained yesterday.
The other important point of MiCA concerns stablecoins, which are distinguished into two categories. The first is "e-money tokens", i.e. classic stablecoins that are based on a single currency like the euro.
The second category is that of "asset-referenced tokens", i.e. stablecoins based on a basket of fiat currencies. The requirements for these stablecoins are not the same and are to be defined progressively by the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA).
Stablecoins not pegged to the Euro will be limited in terms of volume. The gauge is set at $250 million in daily volumes, but does not take into account volumes made solely for trading. In other words, only transactions for the purchase of products and services will be counted.
Conversely, decentralized players, such as DeFi protocols, are not affected by MiCA. This is also the case for NFTs platforms, which will be subject to their own regulation. Work on this has already begun in the European Parliament.
What to expect next?
The text must now be adopted by the European Council (heads of state and government), and then published in the Official Journal of the European Union, normally in June. This procedure is crucial because it is from this date that the transitional period will start during which the industry - and the States - will have to adapt to the new regulation before it becomes mandatory.
- The transition period for stablecoins is 12 months
- The transition period for the rest of the legislation is 18 months
During this period, ESMA and EBA will have to publish the "second layer" of regulation, i.e. the precise terms of application of MiCA, as well as the guidelines of their doctrine on the supervision of cryptos - these two regulators are already doing it on financial services and banks.
In the coming months, the crypto industry and its representatives (start-ups, platforms...), will also be asked to give feedback on the regulation and the conditions of its application.
How are companies preparing?
The arrival of MiCA is an important deadline for companies in the sector. "Everyone is going to have to comply. Some companies are ready or will have no trouble adapting. Others will have more difficulty," explains independent consultant Elizaveta Palaznik.
The main obstacles for web3 companies are: compliance monitoring, internal process implementation, data protection and for some companies, such as trading platforms, the ability to fight money laundering.