This is the epilogue to a very long dossier. After more than two years of debate, this Thursday afternoon the European Parliament definitively adopted the MiCA (Markets in Crypto-Assets) regulation, which will give the European Union a framework for crypto-assets.
European deputies voted on the text in plenary session (every month) at the Parliament in Strasbourg. MiCA was overwhelmingly adopted, with 517 votes in favour, 38 against and 18 abstentions.
"This vote on crypto regulation is the culmination of a long process", Stefan Berger MEP (European People's Party, right), who led the negotiations on MiCA on the European Parliament's side, stressed on Wednesday during the session's debates.
"The European Union had no rules to protect consumers against certain abuses. Now there are tools," he added.
The MiCA text had been ready for a vote for six months, but was postponed twice because of translation problems. The 556-page text had to be translated into 24 languages and with crypto vocabulary that was sometimes a little technical 😅.
What exactly does MiCA cover?
Even if it doesn't cover everything, the spectrum of the text is relatively broad.
It concerns crypto platforms that will have to be accredited (along the lines of what has been set up in France). This authorisation, which is "passportable" in all EU countries, will have an impact on all companies providing services on digital assets in the EU area.
"MiCA will give crypto players visibility and the ability to grow, while guaranteeing consumers a certain level of security", explained European Commissioner for Financial Services Mairead McGuinness yesterday.
The other important point of MiCA concerns stablecoins, which are distinguished into two categories. The first is "e-money tokens", i.e. traditional stablecoins that are based on a single currency such as the euro.
The second category is "asset-referenced tokens", i.e. stablecoins based on a basket of fiat currencies. The obligations placed on 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 indexed 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.
In contrast, decentralised players, such as the DeFi protocols, are not affected by MiCA. This is also the case for NFT platforms, which will be regulated separately. Work on this subject has already begun in the European Parliament.
What can we expect next?
The text must now still be adopted by the European Council (heads of state and government), then it will be 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 begin, 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 the regulation, i.e. the precise terms of application of MiCA, as well as the guidelines for their doctrine on the supervision of cryptos - these two regulators are already doing this on financial services and banks.
In the coming months, the crypto industry and its representatives (start-ups, platforms...), will also be asked to provide 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, setting up internal processes, data protection and for some companies, such as exchange platforms, the ability to combat money laundering.
