1#
In October 2022, EU lawmakers voted 28 to 1 to pass a landmark piece of legislation aimed at regulating the digital asset market - the "Encrypted Asset Market Regulation Act" (MiCAR Act), which will be transferred to the European Parliament, A final vote at the next parliamentary session to come into effect in 2024. This is part of the EU Digital Finance Package, which aims to further promote and support the potential of digital finance in terms of innovation and competition, while mitigating risks.
This bill has been discussed a lot since its inception and has faced many controversies. It is very attractive to onlookers because the market is more regulated and the investment environment is better. Others are concerned that some of the bill's provisions, such as the ability to identify users from their transactions, would infringe on privacy, which is particularly important to the cryptocurrency industry.
The goal of the bill is to establish a framework for a larger cross-border market for cryptoassets and cryptoasset service providers, address the fragmentation of the legal framework applicable to cryptoasset issuers and cryptoasset service providers , and ensure the integrity of the cryptoasset market. functioning while ensuring investor protection, market integrity and financial stability , so that what cannot be adequately achieved by member states can be better achieved at EU level.
2#
The MiCAR Act provides for the following uniform rules :
1. Transparency and disclosure requirements regarding the issuance and permitted trading of encrypted assets.
2. Authorization and supervision of crypto asset service providers and issuers of asset reference tokens, as well as issuers of electronic currency tokens.
3. Operations, organization and governance of asset reference token issuers, e-money token issuers and crypto asset service providers.
4. Consumer protection rules regarding the issuance, trading, exchange and custody of encrypted assets.
5. Measures to prevent market abuse to ensure the integrity of the crypto asset market.
Before entering the market, onlookers need to understand the scope of application of the bill and its specific content, so that they can know whether the promulgation of the bill is beneficial to their careers and whether they want to seek development opportunities in the EU .
3#
The adjustment objects of the MiCA Act are divided into four categories, namely, encrypted assets (crypto-assets), utility tokens (utility tokens), asset-referenced tokens (asset-referenced tokens, commonly referred to as "stable coins" stablecoins) and electronic currency tokens. Coins (electronic money tokens, often referred to as "stable coins" stablecoins).
According to the Act:
1. " Crypto-asset " means a digital representation of value or rights that can be transferred and stored electronically using distributed ledger technology (DLT) or similar technology.
2. " Asset Reference Token " means a cryptographic asset whose purpose is to maintain stability by reference to the value of several fiat currencies, one or several commodities, or one or several cryptographic assets, or a combination of these assets the value of.
3. " Electronic currency token" means a cryptographic asset whose primary purpose is to serve as a means of exchange and which claims to maintain a stable value by reference to the value of legal tender.
4. " Utility token " means a cryptographic asset whose purpose is to provide digital access to goods or services on distributed ledger technology (DLT), and which is accepted only by the issuer of the token.
5. "Crypto-asset issuer " is a legal person that provides any type of crypto-assets to the public or seeks to enter such crypto-assets into a crypto-asset trading platform.
6. "Crypto-asset service provider " means any individual whose occupation or business is to professionally provide one or more crypto-asset services to third parties.
7. " Crypto-Asset Services " means any of the services and activities related to any crypto-asset listed below:
(1) Custody and management of encrypted assets on behalf of third parties . That is, the custody or control of cryptographic assets on behalf of a third party, or the means of obtaining such cryptographic assets, where applicable in the form of private cryptographic keys.
(2) Operation of encrypted asset trading platform . That is to manage one or more encrypted asset trading platforms, on which multiple third-party encrypted asset trading interests can interact in one way to form
A contract that exchanges one cryptoasset for another, or one cryptoasset for fiat currency.
(3) Exchange encrypted assets into legal tender . That is, by using its own capital, it signs a contract with a third party on the purchase or sale of encrypted assets in exchange for fiat currency as legal tender.
(4) Exchange encrypted assets for other encrypted assets . That is, by using its own capital to sign a purchase or sale contract about encrypted assets with a third party in exchange for other encrypted assets.
(5) Execute orders related to encrypted assets on behalf of a third party . That is, to conclude an agreement to buy or sell one or more encrypted assets, or to subscribe for one or more encrypted assets on behalf of a third party.
( 6 ) Allotment of encrypted assets . That is, to promote newly issued encrypted assets or encrypted assets that have been issued but not approved to be traded on encrypted asset trading platforms to specific buyers, and does not involve selling to the public or selling to existing holders of the issuer's encrypted assets.
(7) Receive and transmit encrypted asset orders on behalf of third parties . Receiving an order from a person to buy or sell or subscribe to one or more cryptographic assets and transmitting the order to a third party for execution.
(8) Provide advice on encrypted assets . i.e. providing, giving or agreeing to give personalized or specific advice to a third party, at the request of the third party or at the initiative of the crypto asset service provider offering the advice, involving the acquisition or sale of one or more crypto assets, or the use of Crypto asset services.
4#
1. The MiCA Act does not apply to encrypted assets that meet the following conditions : (All the regulations mentioned below can be found on the website provided at the beginning of the article)
1. (a) financial instruments as defined in point (15) of Article 4(1) of Directive 2014/65/EU ;
2. (b) electronic money as defined in point (2) of Article 2 of Directive 2009/110/EC , except where they qualify as electronic money tokens under this Regulation;
- (c) deposits as defined in point (3) of Article 2(1) of Directive 2014/49/EU of the European Parliament and of the Council ;
- (d) structured deposits as defined in point (43) of Article 4(1) of Directive 2014/65/EU ;
5. Securitization as defined in point (1) of Article 2 of Regulation 2017/2402 of the European Parliament and of the Council of 2017 .
- The MiCA Act does not apply to the following entities and individuals :
1. The European Central Bank, the national central banks of the Member States acting as monetary authorities or other public authorities.
- Insurance companies or companies carrying out reinsurance and buyback activities as defined in Directive 2009/138/EC of the European Parliament and of the Council, when carrying out the activities referred to in that Directive.
- A liquidator or administrator acting in bankruptcy proceedings, except for the purposes of section 42.
- A person who exclusively provides cryptoasset services to its parent company, its subsidiaries, or other subsidiaries of its parent company.
- European Investment Bank.
- European Financial Stability Fund and European Stability Mechanism.
7. International public organizations.
