Skip to content
Finance — Investing — Business — All about technology.

EU's guidelines for MiCAR: Does the regulation cover Bitcoin?

EU's Innovative Crypto Regulation to Encompass All Member States: What Implications for Existing Cryptocurrencies?

,   and  Administrator
2 min read
EU's white paper stipulations in MiCAR: Are they applicable to Bitcoin?
EU's white paper stipulations in MiCAR: Are they applicable to Bitcoin?

A New Era for Cryptocurrencies: The Impact of MiCAR on Established Cryptocurrencies like Bitcoin

EU's guidelines for MiCAR: Does the regulation cover Bitcoin?

The Markets in Crypto-Assets Regulation (MiCAR), a significant component of the broader Markets in Crypto-Assets (MiCA) framework within the European Union, is set to revolutionise the regulatory landscape for crypto-assets. This includes established cryptocurrencies like Bitcoin, which fall outside the scope of traditional financial services laws. Here's how MiCAR is poised to affect Bitcoin and similar digital currencies:

Classification and Requirements

  • Classification: MiCAR does not specifically classify Bitcoin as an e-money token (EMT) or an asset-referenced token (ART) as it is not pegged to any fiat currency or asset basket. Instead, Bitcoin falls under the broader category of "other" crypto-assets, which includes unbacked tokens[1][4].
  • Regulatory Framework: The regulation offers a framework for crypto-assets not covered by existing financial services laws. While Bitcoin and similar cryptocurrencies are not regulated like traditional assets, the EU's focus is on ensuring market stability and consumer protection[4].
  • Authorisation and Compliance: Existing crypto-assets, including Bitcoin, may need to comply with various aspects of MiCAR, particularly if they are traded or held by regulated entities like exchanges or custodians. However, the specific requirements for Bitcoin-like assets are generally less stringent than those for stablecoins, which require reserve management and licensing[1][4].

Implications for Bitcoin and Similar Assets

  • Market Stability: MiCAR aims to promote market stability by regulating aspects like issuance, trading, and custody. This could indirectly affect Bitcoin by ensuring that platforms handling it operate under strict guidelines, enhancing overall market integrity[4].
  • Consumer Protection: The regulation emphasizes consumer protection, which could lead to increased transparency and reliability in the trading of established cryptocurrencies like Bitcoin[4].
  • Innovation and Clarity: By providing a clear regulatory framework, MiCAR encourages innovation while clarifying the legal status of crypto-assets. This clarity can help in the development of new services and applications related to Bitcoin and other cryptocurrencies[1][4].

Specific Requirements Under MiCAR

While MiCAR does not impose direct, specific requirements on established cryptocurrencies like Bitcoin (such as reserve or licensing requirements), it does influence the broader ecosystem:

  • AML and TFR: Anti-money laundering (AML) and Transfer of Funds Regulation (TFR) compliance will be crucial for platforms handling Bitcoin and other cryptocurrencies to ensure legitimacy and reduce illicit activities[4].
  • White Paper Obligation: While not directly applicable to Bitcoin, any new crypto-assets or tokens issued in the EU must adhere to a white paper obligation, providing detailed information about the asset[4].

In summary, MiCAR's impact on Bitcoin is indirect, focusing on enhancing the regulatory environment for crypto-assets in general. It seeks to ensure stability and transparency in the market, which can influence how Bitcoin and similar assets are traded and managed within the EU.

[1] European Commission. (2020). Markets in Crypto-Assets Regulation (MiCA). Retrieved from https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12521-Markets-in-Crypto-Assets-Regulation-MiCA

[4] European Parliament and Council. (2023). Regulation (EU) 2023/1114 of the European Parliament and of the Council of 16 May 2023 on markets in crypto-assets (MiCA) and amending Regulation (EU) 2019/1013. Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114

Read also:

Related

Latest