The Markets in Crypto-Assets Regulation (MiCAR) is a new regulation by the European Union aimed at establishing clear rules for dealing with cryptocurrencies and other digital assets. The goal is to harness the benefits of new technology while keeping financial markets stable and protecting investors.
MiCAR was approved by the European Parliament in April 2023 and officially came into effect in June 2023. It is part of the EU's broader "Digital Finance Package," designed to foster innovation in the financial sector while creating a unified regulatory framework for digital assets.
The regulation has several main goals:
Investor Protection
MiCAR sets rules to increase transparency and disclosure obligations for buying, selling, and issuing crypto assets. This is intended to help investors better understand the risks and opportunities associated with crypto assets.
Financial System Stability
By increasing regulation of crypto markets, MiCAR aims to prevent risks and instabilities from spilling into financial markets.
Protection Against Market Manipulation
The regulation seeks to create fair competition and prevent the misuse of crypto markets.
Anti-Money Laundering (AML)
MiCAR introduces measures to curb illegal activities like money laundering and terrorism financing linked to cryptocurrencies.
MiCAR applies to all companies and individuals in the EU who either issue crypto assets or provide services such as trading, custody, or advisory related to cryptocurrencies.
The regulation distinguishes between different types of crypto assets:
Asset-Referenced Tokens (ART)
These tokens are linked to the value of one or more assets, such as currencies or commodities.
E-Money Tokens (EMT)
These tokens are structured like electronic money and are pegged to the value of a fiat currency, such as the euro or the dollar.
Other Tokens:
This includes so-called "utility tokens," which generally provide access to a specific product or service.
Key requirements of MiCAR include:
Authorization Requirement
Companies offering services in the crypto sector must register with the national supervisory authority of their country and obtain authorization.
Whitepaper Requirement
Anyone issuing new cryptocurrencies must produce a whitepaper containing essential information about the project, the issuer, and potential risks.
Organizational Standards
Companies must ensure they have a clear internal structure and effective risk management.
The implementation of MiCAR is divided into two stages:
From 30.06.2024, the rules for asset-referenced tokens and e-money tokens will apply.
From 30.12.2024, crypto service providers must hold authorization and comply with the more comprehensive MiCAR rules.
Overall, MiCAR aims to create a stable and secure environment for trading and using cryptocurrencies within the European Union.
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