On 30 June 2022, the Council Presidency and the European Parliament reached provisional agreement on the Regulation on markets in crypto-assets (MiCA).

MiCA is part of a broader package of measures to boost digital finance in the EU. The package also includes:

  • A regulation on digital operational resilience (DORA) was agreed in March.
  • DLT pilot which allows for experimentation, on a commercial basis and EU-wide, of financial market infrastructure based on distributed ledger technology. The pilot entered into force in June.
  • Earlier this week the EU agreed an amended Transfer of funds regulation which will significantly enhance the monitoring and traceability of crypto-asset transfers. The agreement provides for an obligation for all crypto service providers involved in crypto transfers to collect data and make them available to the Member State competent authorities in charge of the fight against money laundering and terrorism financing.

The provisional political agreement reached by the European Parliament’s negotiating team will have to be approved first by the Economic and Monetary Affairs Committee, followed by a plenary vote. The Council also has to approve the deal, before it can come into force.

The European Parliament’s press release on the provisional agreement notes:

  • Negotiators decided that MiCA will cover crypto-assets that are not regulated by the existing financial services legislation. The European Securities and Markets Authority (ESMA) will be tasked with providing guidelines in this respect.
  • To counter money-laundering risks the ESMA should set up a public register for non-compliant crypto-assets service providers (CASPs) that provide services in the European Union without authorization.
  • All sorts of non-fungible tokens (NFTs) offered to the public at a fixed price, such as cinema tickets, digital collectibles from clothing brands or in-game items in computer games will be exempt from the scope of MiCA. However, dependant of their development the rules envisage a re-classification of NFTs either as a financial instrument or as a crypto asset subject to MiCA.
  • Significant CASPs will have to disclose their energy consumption. ESMA should prepare regulatory technical standards on these obligations to provide the market with clear guidance on how such disclosures should be carried out.
  • CASPs should make publicly available, in a prominent place on their website, information on their environmental and climate impact and forward this information to their national competent authority, which will inform ESMA.