Overview of MiCA Regulations
• The European Markets in Crypto-Assets (MiCA) regulation was agreed upon in the European Parliament on April 20.
• The roll-out of MiCA begins on June 9 with the European Securities and Markets Authority (ESMA) launching a timeline for three consultations, with the first starting next month.
• ESMA is responsible for developing regulatory technical standards and guidelines for various areas, including criteria to decide when a crypto-asset should be considered a financial instrument under MiFID versus MiCA.
ESMA’s Plan For Rolling Out MiCA
The European Securities and Markets Authority (ESMA) will begin rolling out the European Markets in Crypto-Assets (MiCA) regulation by launching three consultations over the course of the next year. The first consultation will take place in July 2021 and involve authorization, governance, conflicts of interest, and complaint-handling procedures. ESMA must conclude its consultations before the end of Q1 2024 before the first stage of the regulation rollout can begin.
What Needs To Happen Before MiCA Comes Into Force?
Before MiCA comes into force, ESMA needs to develop regulatory technical standards and guidelines for various areas related to cryptocurrency law. This includes criteria to decide when a crypto-asset should be considered a financial instrument under MiFID versus MiCA. Additionally, ESMA has been tasked with developing plans to make Bitcoin environmentally sustainable.
Timeline For Implementing MICA Regulations
The timeline for implementing MICA regulations is as follows: June 9 – ESMA releases timeline of upcoming consultations; July 2021 – First consultation takes place; October 2021 – Second consultation takes place; Q1 2022 – Third consultation takes place; December 2024 -MiCA should be in operation.
The introduction of MICA regulations is groundbreaking in global crypto law and will have far reaching implications on how cryptocurrencies are regulated throughout Europe. It marks an important step forward towards legitimizing cryptocurrencies as viable assets within Europe’s financial landscape.