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MiCA will make its mark: EU Parliament votes in favour of a first comprehensive crypto-legislation

Publications | Dieter Veestraeten & Thomas Charon

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On April 20th 2023, the European Parliament took a plenary vote on the approval of the Markets in Crypto-Assets (MiCA) regulation, making it the first comprehensive legal framework for crypto-assets worldwide. As part of the Digital Finance package, the now approved regulation aims to “ensure that the Union’s financial services legislation is fit for the digital age, and contributes to a future-ready economy that works for the people, including by enabling the use of innovative technologies”.

MiCA translates its aim for a future-ready economy into four essential objectives, namely: (a) providing legal certainty by establishing a legal framework for crypto-assets that are not yet protected by existing financial services legislation; (b) instituting a safe and proportionate framework to support innovation and fair competition to promote the development of crypto-assets; (c) ensuring consumer protection, protection of investors and market integrity in consideration of the risks associated with crypto-assets; and (d) maintaining financial stability and sufficient safeguards to address potential risks.

Despite its very ambitious goals, not all crypto-assets are made subject to MiCA. In particular non-fungible tokens (NFTs) and security tokens that qualify as a financial instrument under MiFID are not covered by the regulation. E-money tokens, asset-referenced tokens and utility tokens on the other hand do fall under the scope of the MiCA-regulation.

Applying to natural and legal persons that take part in the issuance of, offering to and trading of crypto-assets, as well as to providers of services in those markets, MiCA lays down a new set of rules based on the type and classification of the crypto asset. The requirements imposed depend on this division and the significance of the crypto-asset.

An interesting and undoubtedly very important innovation for the international crypto practice is the introduction of a European passport for crypto service providers wishing to offer their services within the EU. This passport will allow a provider to extend its operations across the EU without having to acquire additional licenses.

The adoption of the MiCA Regulation is almost complete. As the last hurdle, a formal vote by the Council is scheduled on May 16th 2023, after which MiCA will be published in the Official Journal of the EU. The entry into force is envisioned in June 2024 for ARTs, EMTs and CAs issuers and in December 2024 for crypto-asset service providers.

If you have any questions or want more information regarding the regulatory framework of crypto-assets, please do not hesitate to contact Dieter Veestraeten (