Initially presented by the European Commission as part of the Digital Finance Package (along with other legislative proposals such as the DLT Pilot Regime or DORA), Regulation (EU) 2023/1114 of 31 May 2023 on markets in crypto-assets1 (the Markets in Crypto-Assets Regulation or MiCA) sets out a comprehensive and harmonised framework for the regulation of crypto-asset markets across the European Union (EU). By regulating the offer of crypto-assets and the provision of crypto-asset services in the EU, MiCA lays the foundation for a new harmonized regulatory framework for crypto-assets in the EU.
MiCA fully applies since 30 December 2024. In this alert we analyse the key elements of the regime, assessing its impact for the market and highlight the opportunities they will bring.
Scope and taxonomy of crypto-assets under MiCA
MiCA distinguishes three types of crypto-assets:
- The first type is the e-money token (EMTs), which is a crypto-asset that aims to stabilise its value by referencing only one official currency.
- The second type is the asset-referenced token (ARTs), which aims to stabilise its value by referencing another value or right, or combination thereof, including one or several official currencies.
- Finally, the third type is a catch-all type, referring to all crypto-assets other than ARTs and EMTs, and expressly including utility tokens.
MiCA also excludes certain crypto-assets from its scope. This is the case for crypto-assets that qualify as financial instruments under Directive 2014/65 (MiFID II). To distinguish between crypto-assets and financial instruments, on 17 December 2024 ESMA published guidelines on the criteria and conditions for the qualification of crypto-assets as financial instruments 2. According to ESMA, the qualification depends on the specific characteristics and nature of crypto-assets. The features, design and rights attached to crypto-assets should be considered, based on a “substance over form” approach. MiCA shall also not apply to crypto-assets that are unique and not fungible with other crypto-assets, unless the de facto features of the tokens or features linked to their de facto uses make them either fungible or not unique.
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