According to a recent notice, the European Union’s (EU) financial regulator is keen on launching a consultation into the bloc’s flagship crypto regulation. Reportedly, the planned consultation process is to be launched in three parts into the EU’s Markets in Crypto Assets (MiCA).
In the official notice, EU’s regulatory entity, European Securities and Markets Authority (ESMA), said the consultation packages would cover the authorization, governance, conflicts-of-interest and complaint-handling procedures of MiCA which is scheduled to start in July this year. The measures will be subject to approval by the European Commission, European Parliament and European Council.
Further, detailing the plan, the notification states that the first consultation package will include technical standards on the application of crypto asset service providers in the EU, as well as procedures for handling complaints and revealing potential conflicts of interest. Then the second stage, which is expected to start in October, will consider disclosures of information to investors, required terms of governance for crypto firms, and “sustainability indicators and adverse impacts on climate.”
According to ESMA, the final consultation, expected in the first quarter of 2024, may consider investor protection and rules to counter market abuse. The MiCA framework suggested an estimated 18-month time frame to fully take effect, with all rules applying beginning in December next year.
After first being proposed by the European Commission in September 2020, the Economic and Financial Affairs Council of the European Union passed the MiCA law in May this year. As per ESMA, the framework had “entered into force” as of June, but regulators and lawmakers seem to be going through proposals aimed at ensuring a smooth implementation of the crypto-focused legislation.
The adoption of MiCA legislation by the European Council followed the formal approval by the European Parliament on April 20 after a series of delays. The legislation was passed with a huge margin of 517-38 and 18 abstentions. Notably, the collaborative efforts of EU member states and institutions have culminated in a comprehensive regulatory framework that aims to protect investors, combat financial crimes, and foster a secure and transparent crypto market.
However, while MiCA has received praise from the crypto industry as well as some nations outside Europe, several EU members have also termed it to be insufficient and requiring addition.
Nonetheless, at a time when the crypto entities are searching for appropriate jurisdictions to conduct business, regulatory clarity of digital assets is often at the forefront of discussions. In such an instance, MiCA aims to create a consistent regulatory framework for cryptocurrencies among EU member states.