The draft MiCA regulation adopted by the European Parliament

On Monday March 14, the Economic and Monetary Affairs Committee adopted by 31 votes for, 4 against and 23 abstentions its mandate to negotiate on new rules relating to crypto-assets. The main approved provisions relate to transparency, communication, authorization and control of operations.

Crypto-assets were until then outside the scope of consolidated European legislation, a few countries such as Luxembourg with the regime of virtual asset service providers (VASP) or France which had adopted in 2019 the law “ PACTE” and finally Germany and its new accreditation process created in 2020, had been considered as interesting initiatives in the establishment of a future European regulatory framework. The Market in Crypto-Assets “MiCA” regulation therefore aims at creating a new harmonized legal framework at European Union level for many types of crypto-assets that are not covered by EU law. This regulation provides a set of definitions of the different crypto-assets, including utility tokens and certain types of stablecoins, a specific regime for supporters of services on crypto-assets at European Union level as well as an authorization regime mandatory valid throughout Europe. In addition, the MiCA Regulation will emphasize consumers protection for the issuance, trading, exchange and custody of digital assets, preventing market abuse in order to ensure the integrity of crypto asset markets and well including the prevention of the fight against money laundering and the financing of terrorism. At the level of the of European Supervisory Authorities (ESAs), members of the European Parliament (MEPs) want that European Securities and Markets Authority (ESMA) monitor the issuance of tokens referencing assets, the supervision of electronic money tokens would be part of the missions of the European Banking Authority (EBA).

One of the questions of the European Parliament remains the significant environmental impact linked to the activity of crypto-currencies, indeed MEPs consider that the mechanisms used for the validation of transactions in crypto-assets have a significant environmental impact, in particular for mechanisms of "Proof of Work", Pow, resulting in high carbon footprint and generation of electronic waste. Although MEPs voted against banning it a few days ago, they ask the European Commission to work on legislative proposal by January 1, 2025 that would include all crypto-asset mining activities in the green taxonomy system.