EU's Crypto-Assets Regulation (MiCA): Discover Which Sectors MiCA Affects in 2025
The European Union's Market in Crypto Assets (MiCA) regulations, which came into effect on December 30, 2023, have introduced a transitional arrangement for existing crypto-asset service providers (CASPs) operating within the EU. This period, known as the grandfathering period, started on the same date and can last up to 18 months, ending on July 1, 2026.
During this period, CASPs that were in compliance with applicable national laws before December 30, 2024, can continue their services while transitioning to full MiCA compliance and securing their MiCA licenses. Member States have the option to simplify the licensing process for providers authorised under prior national frameworks.
However, it's important to note that the transitional period may vary across the EU, with some Member States potentially shortening the period. The maximum allowed duration is 18 months.
After the grandfathering period ends, all CASPs must be fully MiCA-compliant and licensed to legally operate within the EU.
The MiCA regulations cover a wide range of aspects, including transparency and disclosure requirements, authorisation and supervision of CASPs and issuers, and setting standards for the operation, organisation, and governance of issuers and service providers.
MiCA distinguishes three types of crypto-assets: asset-referenced tokens or stablecoins, e-money tokens, and crypto-assets other than asset-referenced tokens or e-money tokens. Issuers of asset-referenced tokens and issuers of e-money tokens must maintain transparency about reserve assets and comply with specific prudential requirements.
Companies wishing to legally operate in the EU will need to meet the minimal requirements outlined in MiCA and get authorised or registered in one of the EU Member States. MiCA also provides protection for crypto-asset holders and service provider clients, and enforces measures to prevent insider trading, unlawful disclosure of inside information, and market manipulation related to crypto-assets.
The European Banking Authority (EBA) and the European Securities and Market Authority (ESMA) are empowered to develop technical standards and to supervise significant issuers and service providers under MiCA.
The MiCA regulations prohibit market abuse activities such as insider dealing, unlawful disclosure of inside information, and market manipulation related to crypto-assets. CASPs are defined as any legal entity or business that offers one or more crypto-asset services to clients professionally.
In summary, the MiCA regulations provide a transitional period for existing CASPs to adapt to the new regulatory environment while ensuring a harmonized, EU-wide legal framework is eventually established. Companies wishing to operate in the EU's crypto-asset market must comply with MiCA's requirements and secure the necessary authorisation or registration.
Businesses in the crypto-asset sector, already operational within the European Union prior to December 30, 2024, can continue their services during the transitional period under the European Union's Market in Crypto Assets (MiCA) regulations. However, these crypto-asset service providers (CASPs) must transition to full MiCA compliance and secure their MiCA licenses before the grandfathering period ends, on July 1, 2026. Meanwhile, technology plays a crucial role in enforcing transparency, authorization, and supervision of CASPs and issuers, as per the MiCA regulations.
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