Welcome to the Regulated United Europe (RUE). As experts in navigating the evolving legal landscape for digital assets, we’re here to provide clarity on the Markets in Crypto-Assets Regulation (MiCA), the landmark new crypto law EU that is set to redefine the crypto regulation in Europe. This article focuses specifically on the MiCA license and how companies can prepare to obtain authorization to operate within the European Union’s harmonized crypto legal framework.
What is MiCA and Why is it Important?
MiCA stands for the Markets in Crypto-Assets Regulation, often abbreviated as MiCAR. It represents a comprehensive legislative framework adopted by the EU as part of its 2020 digital finance strategy. The primary aim of MiCA is to establish a harmonised regulatory framework at EU level for crypto-assets and related services that are not already covered by existing financial services legislation.
Before MiCA, the crypto regulation in Europe was fragmented, with varying national rules, leading to inconsistency and a lack of uniform consumer protection across the EU. The EU’s bold move aims to put order in the “Wild West of crypto-assets” and position the bloc “at the forefront of the token economy”.
The core objectives of MiCA include:
- Ensuring a high level of investor and consumer protection.
- Protecting market integrity and financial stability.
- Supporting innovation and promoting digital finance.
- Combating money laundering (AML) and terrorist financing (CFT).
This regulation mica provides a clear framework enabling crypto-asset service providers (CASPs) to scale their businesses cross-border within the EU.
Who Needs a MiCA License?
The Markets in Crypto-Assets Regulation applies to natural and legal persons engaged in the issuance, offer to the public, and admission to trading of crypto-assets, or those providing services related to crypto-assets in the Union. This means that anyone conducting public activity on crypto-assets within the EU will likely come under MiCA’s scope.
Specifically, MiCA regulates crypto-asset service providers (CASPs). A CASP is defined as any person whose occupation or business is the provision of one or more crypto asset services to third parties on a professional basis.
This regulation mica provides a clear framework enabling crypto-asset service providers (CASPs) to scale their businesses cross-border within the EU.
MiCA applies to the following services:
- Custody and administration of crypto assets on behalf of third parties.
- Operation of a trading platform for crypto assets.
- Exchange services between crypto assets and fiat currencies.
- Exchange services between crypto assets.
- Execution of orders for crypto assets on behalf of third parties.
- Placing of crypto assets.
- Reception and transmission of orders for crypto assets on behalf of third parties.
- Providing advice on crypto assets.
- Portfolio management on crypto assets.
- Transfer services for crypto assets on behalf of third parties.
Importantly, MiCA compliance is required for any CASP serving European interests, regardless of where the provider is registered or established.
MiCA Regulatory Framework and Asset Classification
The MiCA regulatory framework covers a wide variety of crypto-assets. It classifies crypto-assets into three main categories, each subject to different requirements depending on their structure and associated risks:
This category includes a wide variety of crypto-assets, notably utility tokens. Offerors or persons seeking admission to trading for these tokens must be legal persons and are primarily required to draft, notify to the relevant national authority, and publish a crypto-asset white paper. There is no general authorization requirement for the issuance of these tokens, but the white paper acts as a disclosure document.
These are crypto-assets that aim to stabilise their value by referencing another value or right, or combination thereof, including one or several official currencies. Issuers of ARTs face stricter requirements and must obtain authorization. Only EU-incorporated legal entities are generally allowed to issue them, with limited exceptions for small offerings or offerings to qualified investors. ART issuers must maintain sufficient reserves, invest in highly liquid low-risk instruments, and publish monthly updates.
These crypto-assets aim to stabilise their value by referencing only one official currency. Their function is similar to electronic money. Issuers of EMTs also face strict requirements and must obtain authorization. Authorized credit institutions can offer or list EMTs after notifying their supervisory authority and publishing a white paper. EMTs are explicitly defined to avoid being treated as deposits excluded from MiCA’s scope.
Certain crypto assets are not covered by MiCA:
- Crypto-assets that qualify as financial instruments (regulated under MiFID II).
- Digital assets that are not transferable to other holders (like loyalty points).
- Central Bank Digital Currencies (CBDCs).
- Generally, unique and non-fungible cryptocurrencies (NFTs), although large series might be scrutinised.
- Borrowing or lending of crypto-assets is referred to national rules.
- MiCA does not regulate the underlying technology or the mining process itself.
MiCA Licensing Requirements Explained
Under MiCA, obtaining a crypto license in the EU is mandatory for most CASPs providing services on a professional basis. This license is valid in all EU member states, allowing for cross-border operations.
The MiCA compliance process involves several key steps and requirements:
- Legal Entity and Physical Presence: The applicant must be a legal person established in the EU and maintain a registered office within the Union. At least one director must be an EU resident.
- Authorization Application: CASPs must apply for authorization from the relevant national competent authority (NCA) in the Member State where they have their registered office. Existing regulated entities (like credit institutions or EMIs) might have a simplified notification procedure for certain crypto-asset services.
- Governance and Internal Policies: Companies must develop robust internal policies and mechanisms to ensure compliance with regulatory requirements. This includes procedures for business continuity, risk management, and handling complaints.
- Capital Requirements: CASPs must meet specific capital requirements. Issuers of ARTs and EMTs have additional, more stringent capital requirements.
- AML/KYC Procedures: Implementation of strict Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures is mandatory to prevent financial crime.
- Operational Security: Stringent application of security measures is required to safeguard clients’ data and assets.
- Transparency and Disclosure: Providing clear and complete information to users about products, services, and associated risks is fundamental. This includes obligations related to marketing communications.
- White Paper Obligations (for issuance): Offerors or persons seeking admission to trading for non-ART/EMT crypto-assets must produce, notify, and publish a compliant white paper. The white paper must contain specific information including risks, rights, technology, and a statement from management confirming compliance.
The European Supervisory Authorities (ESMA and EBA), in cooperation with EIOPA and the ECB, are developing detailed technical standards and guidelines (Level 2 and 3 measures) to specify MiCA’s requirements. These standards provide crucial details on implementation. ESMA also maintains a central register of white papers, authorised CASPs, and non-compliant entities.
MiCA Regulation Timeline and Implementation
| September 2020 | European Commission proposes the draft for MiCA. |
| June 2022 | Political agreement reached between the European Parliament and the Council. |
| April 2023 | European Parliament approves MiCA |
| June 9, 2023 | MiCA is published in the Official Journal of the European Union. |
| June 29, 2023 | MiCA officially enters into force. |
| June 30, 2024 | Provisions on stablecoins (ARTs and EMTs) come into effect. Businesses dealing with ARTs and EMTs must be fully compliant with these rules from this date. |
| December 30, 2024 | MiCA comes fully into force. All other MiCA provisions, including the licensing requirement for CASPs providing services other than ART/EMT issuance, become applicable. |
While MiCA is a regulation directly applicable in EU member states, national legislation sometimes needs alignment or designation of competent authorities. Countries like Germany have already passed specific acts (Finanzmarktdigitalisierungsgesetz) to facilitate MiCA’s implementation. Many other EU countries, including Lithuania, Estonia, France, etc., are actively preparing for the implementation of MiCA, which introduces common rules across the European Union.
There is a transition period established for existing CASPs. While MiCA fully applies from December 30, 2024, the transition period for adaptation generally extends until July 1, 2026. However, some countries, like Lithuania, have proposed renouncing the transition period and applying MiCA requirements from December 30, 2024.
How Regulated United Europe (RUE) Can Assist
Navigating the intricacies of the EU MiCA framework and obtaining a MiCA license requires a deep understanding of the regulatory text and the numerous technical standards and guidelines being developed. The requirements are substantial and necessitate significant preparation for companies operating in the crypto market in Europe.
At Regulated United Europe, we specialise in providing comprehensive support to crypto businesses seeking to comply with EU regulations, including obtaining a MiCA license. Our experts closely monitor regulatory developments and are equipped to guide you through every step of the process, from assessing your business’s scope under MiCA to preparing and submitting your authorization application.
Whether you are a new crypto startup or an existing provider needing to adapt to the new rules, we can assist with:
- Detailed analysis of how MiCA applies to your specific services and assets.
- Preparation of the necessary documentation, including compliant crypto-asset white papers.
- Guidance on establishing the required internal policies, governance structures, and risk management frameworks.
- Support with implementing robust AML/KYC procedures.
- Assistance with the authorization application process with the relevant national competent authority.
- Navigating the requirements related to asset classification and specific rules for ARTs and EMTs.
The EU crypto regulation MiCA marks a new era for digital assets in Europe. By ensuring compliance and obtaining the necessary license, your business can gain legal certainty, build investor trust, and operate freely across the EU single market.
Contact Regulated United Europe today to discuss your MiCA license requirements and start your journey towards full compliance with the new EU crypto rules.
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