Navigating MiCAR: Your essential guide

MiCAR, the EU regulatory framework for crypto-assets and service providers, ensures legal certainty, innovation and consumer protection. MiCAR's impact extends beyond the EU: Third-country firms, including Switzerland's “Crypto Valley” enterprises, must also navigate this regulation to engage with EU-based clients.

Digital finance strategy and AML/CFT legislative package

The EU’s digital finance strategy prioritizes unity, innovation, data-driven finance and digital resilience. The Markets in Crypto-Assets Regulation (MiCAR) addresses crypto-assets from an investor protection, innovation and EU policy leadership point of view. The Digital Operational Resilience Act (DORA) ensures the financial sector’s readiness for digital disruptions by setting uniform security requirements. Simultaneously, the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) legislative package strengthens rules on crypto-asset transfers, ensuring financial transparency and compliance with international standards to prevent criminal use. Together, these measures shape a comprehensive framework for a secure and innovative digital financial landscape in Europe.

MiCAR

MiCAR, is a comprehensive regulatory framework developed by the EU to oversee crypto-assets and their service providers. Its primary objectives are to:

  • Provide legal certainty for crypto-asset issuers and service providers
  • Foster innovation while ensuring consumer protection
  • Safeguard financial stability in the growing crypto market
  • Counteract money laundering and other financial crimes

MiCAR establishes a unified set of regulations for the EU crypto space, covering aspects such as authorization, supervision, organizational structures, business conduct rules and consumer protection measures. Formerly known as VASPs (virtual asset service providers), crypto businesses are reclassified as CASPs (crypto-asset service providers) under MiCAR. EY is poised to provide comprehensive support for a successful licensing outcome.

MiCAR license applications are expected to open in Q2 of 2024, requiring current VASP license holders to reapply for a MiCAR CASP license. The transition period, varying by Member State and extending up to July 2026, allows VASPs to continue operations during the review of their MiCAR license applications.

A MiCAR CASP license offers passporting capabilities, enabling operations in any EU country. Initial regulatory provisions come into effect on 30 June 2024 for stablecoin issuers and 30 December 2024 for crypto exchanges. While specific country requirements are yet to be published for some jurisdictions, the core principles of MiCAR are known, meaning that proactive steps can already be taken toward full compliance.

Many thanks to the EY Law team Maxime Ochrymowicz, Ana Carolina Brönnimann, and Aline Bodmer for their excellent cooperation and valuable contributions.

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