Background, objectives and current status

On 20 April 2023, the European Parliament adopted Regulation (EU) 2023/1114 on Markets in Crypto-Assets (Markets in Crypto-Assets Regulation – MiCAR). The European Council gave its approval on 16 May 2023. The Regulation was published in the Official Journal of the European Union on 9 June 2023 and entered into force on 29 June 2023. 

On 24 September 2020, the European Commission had submitted the legislative proposal for MiCAR as a part of the package regarding the digitalisation of the financial sector. In addition to the MiCAR proposal, the package included the Digital Operational Resilience Act (DORA), a proposal for a pilot regulation for market infrastructures that are based on distributed ledger technology (DLT), and a strategy for a digital financial sector.

MiCAR is aimed at creating a harmonised European regulatory framework for crypto-assets that promotes innovation and enables use of the potential offered by crypto-assets while ensuring financial stability and investor protection.

Regulatory content

MiCAR distinguishes between the activities carried out on the primary market, i.e. the issuance of crypto-assets, and the services provided on the secondary market, known as crypto asset services. In detail, MiCAR regulates transparency and disclosure requirements for the issuance and trading of crypto-assets, the authorisation requirement for and supervision of crypto asset service providers (CASPs) and issuers of crypto-assets, and the proper business organisation of crypto asset issuers and crypto asset service providers. The regulation also addresses investor and consumer protection for the issuance, trading and custody of crypto-assets and provides for the prevention of market abuse on crypto currency exchanges.

The various rules set out in MiCAR are to enter into force at different points in time: 

Rules regarding asset-referenced tokens (ARTs) and e-money tokens (EMTs) set out in Title III and Title IV will apply from 30 June 2024. 

Rules regarding the authorisation and ongoing supervision of CASPs in Title V will apply from 30 December 2024. All the other provisions of MiCAR (in particular Title II and Title VI) that are not directly applicable under Article 149(4) of MiCAR will also apply from 30 December 2024. In addition, some individual articles already apply as of 29 June 2023.

At the same time, the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) are preparing regulatory technical standards, implementing technical standards and guidelines that will further specify the application of MiCAR. 

FAQs regarding MiCAR

The following questions regarding MiCAR are intended to give an initial overview of the most important issues regarding the services governed by MiCAR, without any claim to completeness.