After issuing its first set of proposals around the markets in crypto-assets (MiCA) regulation, the financial regulator of European Union (EU) has added a warning.
On 12 July, the European and Securities Markets Authority (ESMA) published a consultation paper.
? ESMA published ? consultation package under the Markets in Crypto-Assets Regulation #MiCA: https://t.co/MD2tdKi8v9
? input on rules for crypto-asset service providers on ? authorisation, identification and management of conflicts of interests ? complaints
?️ 20 September pic.twitter.com/mhiYNxFWA9
— ESMA – EU Securities Markets Regulator ?? (@ESMAComms) July 12, 2023
On the same day, ESMA chair Verena Ross warned consumers in the EU that “there will be no such thing as a safe crypto-asset.” Ross cautioned consumers that cryptocurrencies are still risky.
?️ ESMA Chair, #VerenaRoss: This […] is an important milestone for ESMA in the implementation of the #MiCA framework. It translates our ambition to set high regulatory standards in the EU for crypto-asset related activities into concrete requirements. https://t.co/MD2tdKi8v9 pic.twitter.com/5rNXGdjrQT
— ESMA – EU Securities Markets Regulator ?? (@ESMAComms) July 12, 2023
The consultation paper solicits comments on regulatory and technical standards from all the stakeholders. The regulator was also asking for confidential details about crypto firms’ expected revenue, number of white papers, and the usage of on- and off-chain trading.
Applicants must demonstrate that they will not mix client funds and crypto, and will not use the assets for the company’s own account. They should also provide information about the security of their ICT system and underlying distributed ledger technology.
Participants should file their responses by 20 September.
The regulator informed that it will begin the second round of consultation in October which will cover sustainability and record-keeping. Its third round will take place in early 2024 which will address how foreign companies will be able to serve EU consumers.
The new MiCA proposals also require crypto service providers to handle customer complaints in the specified manner. The proposals also lay down conflict-of-interest rules in the virtual assets industry.
EBA asks stablecoin issuers to be ready ahead of MiCA
MiCA was approved by the European Parliament in April. The EU Council also unanimously passed it in May. It will come into force in 2024 and will be fully implemented by 2025.
The law will give crypto exchanges and wallet providers the ability to operate across the 27-nation bloc with one license.
On 12 July, the European Banking Authority (EBA) also issued a press statement.
#EBA encourages institutions involved in asset-referenced token (ART) or electronic money token (EMT) activities to take timely preparatory steps towards the application of #MiCAR ? ?https://t.co/WMCw4iG9zo#Crypto pic.twitter.com/m8azEPZbvl
— EU Banking Authority – EBA ?? (@EBA_News) July 12, 2023
It urged stablecoin issuers to start preparing for the MiCA regulation. This way, there will be no urgency in trying to adhere to the guidelines when they are implemented.
