Proposal for a Regulation on Markets in Crypto-assets

Summary:

Legislative initiative tabled by the European Commission on 24 September 2020, proposing a framework aimed at regulating markets in crypto-assets (MiCA). It aims to amend Directive (EU) 2019/1937.

Further information:

Crypto-assets are a digital representation of values or rights that can be stored and traded electronically. They can serve as an access key to a service, could facilitate payments, or could be designed as financial instruments.

The initiative cover crypto-assets falling outside existing EU financial services legislation, as well as e-money tokens. It comprises a set of objectives - legal certainty; support to innovation; introduction of appropriate levels of consumer and investor protection and market integrity; financial stability. This proposal includes safeguards to address potential risks to financial stability and orderly monetary policy that could arise from stablecoins. It also aims to amend Directive (EU) 2019/1937, concerning rules and procedures for the protection of whistleblowers.

Since the publication of the 2018 Fintech Action Plan, the Commission examined the opportunities and challenges raised by crypto-assets. The draft law was eventually tabled by the European Commission on 24 September 2020, as part of the so-called Digital Finance Package. The Council of the European Union adopted its general approach on 24 November 2021.

• Primary Source

Commentary and Analysis

Linklaters: FintechLinks Blog, 02/10/2020: The EU’s proposal to regulate the crypto industry: what, how and when? https://www.linklaters.com/en/insights/blogs/fintechlinks/2020/october/the-eus-proposal-to-regulate-the-crypto-industry-what-how-and-when

White&Case: Alerts, 14/10/2020: EU Regulation on Markets in Crypto-assets and DLT Pilot Regime https://www.whitecase.com/publications/alert/eu-regulation-markets-crypto-assets-and-dlt-pilot-regime

Norton Rose Fullbright: Publications, November 2020: MiCA: Regulating provision of services in crypto-assets https://www.nortonrosefulbright.com/en/knowledge/publications/03f73e05/mica-regulating-provision-of-services-in-crypto-assets

Allen & Overy: Webinar, 25/11/2020: New EU regulation of crypto assets (MiCA) https://www.allenovery.com/en-gb/global/news-and-insights/publications/webinar-new-eu-regulation-of-crypto-assets-mica

Oxford University: Law Faculty Blog, 30/11/2020: The Markets in Crypto-Assets Regulation (MiCA) and the EU Digital Finance Strategy https://www.law.ox.ac.uk/business-law-blog/blog/2020/11/markets-crypto-assets-regulation-mica-and-eu-digital-finance-strategy

Lexology: Library, 03/12/2020: New rules for cryptocurrencies in the EU soon to come? https://www.lexology.com/library/detail.aspx?g=5667ecda-6297-4045-85e3-c3c15b1155c7

PricewaterhouseCoopers (PwC): Financial Services Regulatory Insights, 09/12/2020: The Markets in Crypto-Assets Regulation: Paving the way for change https://pwc.blogs.com/fsrr/2020/12/the-markets-in-crypto-assets-regulation-paving-the-way-for-change.html

Stanford Law School: Blog, 12/01/2021: New Crypto Rules in the European Union – Gateway for Mass Adoption, or Excessive Regulation? https://law.stanford.edu/2021/01/12/new-crypto-rules-in-the-eu-gateway-for-mass-adoption-or-excessive-regulation/

Centre for European Policy (CEP): Policy Brief No 1, 22/02/2021: Regulating Crypto-Assets – Part I: Stablecoins https://www.cep.eu/en/eu-topics/details/cep/regulating-crypto-assets-stablecoins-ceppolicybrief-com-2020-593.html

Centre for European Policy (CEP): Policy Brief No 3, 09/03/2021: Regulation of Crypto-Assets – Part II: Cryptocurrencies and Utility-Tokens https://www.cep.eu/en/eu-topics/details/cep/kryptowerte-cepanalyse-zu-com2020-593-1.html

Centre for European Policy (CEP): cepInput No 7, 09/03/2021: Regulating Crypto-Assets: MiCA-Regulation https://www.cep.eu/en/eu-topics/details/cep/regulating-crypto-assets-mica-regulation-cepinput.html

European Banking Federation (EBF): EBF key messages - European Commission proposal: Regulation on Markets in crypto-assets (MiCA) (06/05/2021) https://www.ebf.eu/wp-content/uploads/2021/12/210506-EBF_MiCA_key-messages.pdf

London School of Economics (LSE): EUROPP Blog, 05/07/2021: What the EU’s new MiCA regulation could mean for cryptocurrencies https://blogs.lse.ac.uk/europpblog/2021/07/05/what-the-eus-new-mica-regulation-could-mean-for-cryptocurrencies/

ING Think: Article, 24/03/2022: Regulation and the coming of age of Europe’s crypto markets https://think.ing.com/articles/regulation-and-the-coming-of-age-of-europes-crypto-markets/

KU Leuven: CiTiP Blog, 19/04/2022: NFTs excluded from MICA: A freeport for crypto pirates? https://www.law.kuleuven.be/citip/blog/nfts-excluded-from-mica-a-freeport-for-crypto-pirates/

European Capital Markets Institute (ECMI): Commentary, 20/05/2022: EU’s proposed crypto regulations are flawed https://www.ecmi.eu/publications/commentaries/eu%E2%80%99s-proposed-crypto-regulations-are-flawed

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News

CityAM, 13/03/2022: Crypto industry warns of ‘existential threat’ from draft EU regulation https://www.cityam.com/crypto-industry-warns-of-existential-threat-from-draft-eu-regulation/

Euronews, 14/03/2022: Europe rejects proposal limiting PoW cryptos such as Bitcoin but sets draft rules for sustainability https://www.euronews.com/next/2022/03/14/europe-to-vote-on-limiting-pow-crypto-mining-used-by-bitcoin-and-ethereum

Reuters, 19/04/2022: European crypto industry steps up efforts to influence EU policy https://www.reuters.com/technology/european-crypto-industry-steps-up-efforts-influence-eu-policy-2022-04-19/

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Official

European Commission: Publications: Digital Finance Package https://ec.europa.eu/info/publications/200924-digital-finance-proposals_en

EUR-LEX: SWD(2020)380: Staff Working Document accompanying the Proposal - Impact Assessment https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2020:380:FIN

EUR-LEX: SWD(2020)381: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2020:381:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on Digital finance: Markets in Crypto-assets (MiCA) (2020/0265(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2020/0265(COD)

European Parliament: Legislative Train Schedule: Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-assets https://www.europarl.europa.eu/legislative-train/theme-a-europe-fit-for-the-digital-age/file-crypto-assets-1

European Commission: Press Release, 24/09/2020: Digital Finance Package: Commission sets out new, ambitious approach to encourage responsible innovation to benefit consumers and businesses https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1684

Council of the European Union: Press Release, 24/11/2021: Digital finance package: Council reaches agreement on MiCA and DORA https://www.consilium.europa.eu/en/press/press-releases/2021/11/24/digital-finance-package-council-reaches-agreement-on-mica-and-dora/

S&D EP Group: Newsroom, 28/02/2022: MiCA - Regulating crypto-assets: S&Ds deplore conservatives caving in to lobbying pressure https://www.socialistsanddemocrats.eu/newsroom/mica-regulating-crypto-assets-sds-deplore-conservatives-caving-lobbying-pressure

European Parliament: Press Release, 14/03/2022: Cryptocurrencies in the EU: new rules to boost benefits and curb threats https://www.europarl.europa.eu/news/en/press-room/20220309IPR25162/

Renew Europe EP Group: News, 14/03/2022: Renew Europe supports an ambitious and future-proof Regulation for Crypto-Assets in Europe https://www.reneweuropegroup.eu/news/2022-03-14/renew-europe-supports-an-ambitious-and-future-proof-regulation-for-crypto-assets-in-europe

EPP EP Group: Newsroom, 14/03/2022: Crypto 'Wild West' needs a European sheriff https://www.eppgroup.eu/newsroom/news/crypto-wild-west-needs-a-european-sheriff

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