MiCA Act: One step closer to the regulation of cryptoassets in Europe

The Council of the European Union has signed the text of the MiCA Act, the law that will regulate cryptoassets in the region, and now all that is needed is the approval of the Seimas.
What is the MiCA Act?

The MiCA Act, or Cryptoasset Markets Act, began its development in 2020, and establishes the creation of a register of Exchanges that operate in European territory, who must have a license to offer services in Europe.

Another of its bases is the obligation imposed on companies to create a database of all users who enter their platforms, although this goes against the concept of decentralization.

The representatives that make up the European Union They approved the past October 5 the final text of the Regulations on Cryptoasset Markets, which aims to regulate the cryptocurrency market within the European region starting in 2023.

Let's look at some of the most relevant issues addressed in the text presented.

Stablecoins

Within the presented text of the MiCA Act, the regulation of Stablecoins that are referenced to any asset (official currency). They will be considered official coins all those that are issued by a monetary authority or a central bank. This consideration also includes decentralized stablecoins, as long as they are referenced.

E-money tokens

The regulation for this type of cryptoassets requires that these Tokens are referenced to a official currency, in the same terms that this concept was defined in the previous point. This definition therefore excludes Bitcoin, since it is not considered an official currency, despite being considered a legal tender in several countries, including, Salvador.

DAOs

In the text of the MiCA Act, no regulation has been presented for this type of organization, and it has also required the legal personality, or the recognition of the type”Undertaking“by any of the member states, to be able to Issuing cryptoassets or provide any service of cryptoassets.

A company of the type”Undertaking“is considered this way when it comes to a company or entity without legal personality. An undertaking may provide cryptoasset services or issue cryptoassets, provided that its legal status guarantees a level of protection of the interests of third parties that is equivalent to that of legal persons and, in addition, is subject to appropriate prudential supervision.

NFTs

As for the non-fungible tokens, the MiCA Act it will not apply to cryptoassets that are unique in nature and are not fungible with other cryptoassets, this includes digital art and collectibles. But it should be emphasized that the fractions of a single, non-fungible cryptoasset will not be considered as a non-fungible one, since its issuance as a series will be an indicator of its fungibility.

Conclusion

Only approval remains, by the European Parliament, of the text approved in the talks with the European Council. Once that favorable vote takes place in Parliament, it will be published in the TWELVE, coming into force after 20 days, although part of its regulation will be applicable 18 months later, except for the regulation of tokens referenced to assets and that of e-money tokens, which will be applicable after 12 months.

Without a doubt, this is a big step forward for the cryptoasset and tokenization sector, so news like this lets us know that we are in the right place. We will continue to provide news about the MiCA Act to keep all our investors informed.

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