July MiCA Developments: A Closer Look at Key Regulations and Guidelines
- James Ross
- Jul 13, 2024
- 2 min read
July 2024 has been a pivotal month for the Markets in Crypto-Assets Regulation (MiCA), marking significant progress in establishing a clear regulatory framework for crypto assets in the EU. Here's a recap of the key developments:
EBA Guidelines on Information Requirements for Transfers of Funds and Crypto-Assets (Regulation 2023/1113):
Extended Scope: The European Banking Authority (EBA) guidelines expand the existing "travel rule" to include crypto-asset transfers, bringing them under the same scrutiny as traditional financial transactions.
Key Points for Firms:
Implement systems for collecting and transmitting required transfer information.
Address technical limitations that may hinder compliance.
Develop procedures for handling self-hosted wallets.
Direct debit providers must adapt processes to comply with specific requirements.
MiCA Final Report on Draft Technical Standards:
Sustainability Disclosures: Mandatory disclosures on energy consumption for all crypto-assets and optional disclosures on waste and natural resources.
Key Points for Firms:
Prepare for mandatory energy consumption disclosures.
Gather data for optional disclosures on waste and natural resources.
Utilise white papers for website disclosures and cooperate with other CASPs for consistency.
EBA Supervisory Priorities for ART/EMT Issuers:
Key Priorities: Strong internal governance, risk management, financial resilience, technology risk management, and financial crime risk management.
Key Points for Firms:
Prioritise compliance with supervisory priorities to ensure holder protection, financial stability, and market integrity.
Additional Considerations: Proportionate, risk-based supervisory approach, agility to adapt to market developments.
EBA's Call for MiCAR Compliance:
Key Implications: Issuers and offerors of asset-referenced and e-money tokens (ARTs and EMTs) must fully comply with MiCAR.
For Consumers: Verify the MiCAR compliance of any ARTs or EMTs before purchase.
ESAs Consultation Paper on Classification of Crypto-Assets:
Key Points: Proposes a standardised test and templates for explanations and legal opinions to determine if crypto-assets fall under MiCA and, if so, how they should be classified.
Key Points for Firms:
Carefully assess products and services to determine if they fall under MiCA.
Ensure compliance of crypto-asset white papers and documentation with guidelines.
Conclusion:
July 2024 has seen substantial progress in implementing MiCA, with new guidelines and consultations providing much-needed clarity for the crypto industry. However, these developments also pose challenges for firms, requiring them to review and adapt their compliance operations carefully. The future of digital assets in the EU is taking shape, and these developments represent a crucial step towards a well-regulated and transparent crypto market.
