Timeline of MiCA
Objectives of MiCA
Create an international and comprehensive framework of regulations to replace ad hoc or individual regulations found already in some EU nations.
Set clear rules for token issuers and crypto asset service providers.
Establish a new framework for crypto asset regulation where it is not already covered by existing financial legislation.
Who and What Does MiCA Apply To?
E-money Tokens: These assets seek to stabilize value by referencing a single official currency, and in this way resemble electronic money. They are, in a sense, surrogates for fiat currencies. This category includes most fiat-backed stablecoins.
Asset-referenced Tokens: These tokens attempt to stabilize value by referencing either a basket of currencies or other assets. This includes tokens backed by commodities like gold, such as Digix (DGX).
Other Tokens: The final category includes all other tokens, including utility tokens and many other types.
What Are MiCA’s New Rules?
NFTs, Whitepapers, and Stablecoins
What Does MiCA Mean for an Investor?
Markets in Crypto-Assets, or MiCA, is a regulation framework in the EU governing a host of cryptocurrency policies.
MiCA has passed through various stages of enactment among EU legislators and will take effect in the months and years to come.
MiCA is a wide-ranging set of rules and regulations aiming to replace ad hoc, individualized regulations previously existing across different EU states, to set clear rules for token issuers and other participants, and to create regulation for areas not previously regulated.
MiCA will govern categories of crypto-assets including e-money tokens (tokens referencing a single official currency), asset-referenced tokens (those referencing a basket of currencies, commodity, or other asset), and other tokens as well. Each category will have different regulatory requirements.
MiCA’s rules require crypto-asset service providers to adhere to common standards regarding security, anti-money laundering protections, and a host of other protocols.
MiCA does not cover most NFTs (except fractionalized NFTs and NFTs released as collections). Similarly, it does not cover DeFi apps that exist without an intermediary.
Crypto-asset issuers must provide white papers under MiCA, and in some cases these white papers must be approved before a token is issued to the public.
Algorithmic stablecoins are banned entirely under MiCA, and other stablecoins face stricter requirements, including the need to have reserves to match liabilities.