The European Union (EU) has implemented new guidelines that enable market participants to categorize cryptocurrencies and digital assets under the Markets in Crypto-Assets Regulation (MiCA).
Three European Supervisory Authorities (ESAs)—the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA)—released a consultation paper on July 12 to standardize and clarify the classification of these assets throughout the region.
Crypto classification under MiCA
The recently published guidelines offer a structured method for categorizing a variety of crypto-assets.
This encompasses assessing whether a token is subject to MiCA using question-based inquiries, including the issuer, blockchain-based nature, and financial instrument classification.
It also assists in determining whether the token in question is a standard crypto-asset under MiCA or if it could be classified as a different form of asset, such as an asset-referenced token (ART) or an e-money token (EMT).
In their white papers, issuers of ARTs must include a legal opinion that elucidates the classification of these tokens. The opinion should verify that the tokens are not Electronic Money Tokens (EMTs) or any other form of crypto-asset that is excluded from the scope of MiCA.
The white papers must explain the classification of crypto-assets that do not fit under the categories of ARTs or EMTs.
EU MiCA Compliance
The guidelines invite market stakeholders to submit any comments on the consultation paper by mid-October. A virtual hearing is scheduled for Sept. 23.
In a post on X, Patrick Hansen, the senior director of EU strategy and policy at Circle, praised the guidelines as “extremely beneficial” and noted that “a significant number of individuals are making errors in their token classifications under MiCA.”
Circle complied with MiCA as one of the first stablecoin issuers, resulting in its and EURC being regulatory compliant under the new regulations.
This follows the initial set of regulations under MiCA, which were implemented on June 30 and focused on stablecoins and stablecoin issuers. December 2024 is the anticipated date for implementing the subsequent MiCA regulations.
The Cardano Foundation, responsible for the ADA cryptocurrency, published sustainability indicators following the upcoming Markets in Crypto-Assets (MiCA) six months before they were effective.
