Markets in Crypto-Assets (MiCA) is a regulation in EU law. It is intended to help streamline distributed ledger technology (DLT) and virtual asset regulation in the European Union (EU) whilst protecting users and investors. MiCA was approved on 20 April 2023 by the EU Parliament and will become law in 2024.
The full name of the 24 September 2020 proposal is the "Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Markets in Crypto-assets, and amending Directive (EU) 2019/1937 COM/2020/593 final". MiCA is part of a Digital Finance Package that intends to transform the European economy in the coming decades.
MiCA provides legal certainty around crypto assets – cryptocurrencies, security tokens and stablecoins. It is similar to Europe’s Markets in Financial Instruments Directive (MiFID), which is a legal framework for securities markets, investment intermediaries and trading venues. It is expected to be different from the UK's crypto regulatory framework. The UK will start by regulating only a few crypto assets, while the EU's MiCA regime is expected to have a wider focus.
Groundwork for MiCA started in 2018 due to increased public interest within the EU in cryptocurrencies. The European Commission adopted the digital finance package which included MiCA in September 2020, leading to extensive discussions among the preparatory bodies (the EU Council, the European Central Bank, the Economic and Social Committee).
After 18 months of debate, the European Union passed the Markets in Crypto-Assets regulation (MiCA) in 2022. Regulations on stablecoins were expected to take effect in June 2024 and those affecting crypto asset service providers in the following December. However, service providers with fewer than 15 million active users in Europe would not be considered “significant” under Mica and so would be supervised by national EU authorities rather than the European Banking Authority and the European Central Bank. Elizabeth McCaul, a member of the ECB’s supervisory board, warned of “gaps in the framework” for regulating crypto markets and that traditional approaches might not work. She said that the 15m threshold would probably exclude Binance, and FTX before its collapse. She had made similar warnings at a Financial Times conference in November 2022.
- MiCA text adopted by European Parliament on 20 April 2023 on europa.eu
- MiCA on europa.eu
- Procedure 2020/0265/COD on EUR-Lex
- Procedure 2020/0265(COD) on ŒIL
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