Unraveling Europe's MiCA: The Need for Unified Crypto Regulation

• Crypto Regulatory Landscape and the Role of the Inaugural Global Protocol Report
• MiCA - A Beacon for Harmonizing International Crypto Regulations
• MiCA's Role in the EU's Comprehensive Digital Finance Strategy
• Coverage and Emphasis of the New Regulation
• Expected Impact on Switzerland and other Non-EU Countries
• Conclusion

Crypto Regulatory Landscape and the Role of the Inaugural Global Protocol Report

The fluctuating environment of blockchain and cryptocurrency demands a unified regulatory and business development ecosystem to streamline collaboration and innovation. The Inaugural Global Protocol Report, a joint venture by Crypto Oasis, Crypto Valley, the DLT Science Foundation, and Inacta Ventures, aims to help the industry ease into a complex world of regulation and protocol development. This report, among other things, elaborates on the Markets in Crypto-Assets Regulation (MiCA), a new European regulation standardizing crypto practices in all 27 member countries.

MiCA - A Beacon for Harmonizing International Crypto Regulations

Regulations in the cryptocurrency world vary greatly based on geographical and jurisdictional differences. To mitigate this, the European Union (EU) introduced the Markets in Crypto-Assets Regulation (MiCA). This initiative, which could potentially serve as a global blueprint, aims to harmonize Crypto regulations at an international level. Currently, MiCA stands as a promising prospect for achieving this goal.

MiCA's Role in the EU's Comprehensive Digital Finance Strategy

MiCA is not an independent regulation but a vital component of the comprehensive digital finance strategy developed by the European Commission. This broader strategy covers various aspects, such as the upcoming Regulation on digital operational resilience (DORA), which extends to crypto-asset service providers. It also includes a fresh Regulation focused on a distributed ledger technology (DLT) pilot regime, which aims to improve the functionality of financial market infrastructures built on DLT principles.

Coverage and Emphasis of the New Regulation

The regulation stretches its ambit to cover a wide range of subjects, from issuers of unbacked crypto-assets to stablecoins, platforms trading crypto-assets, and wallets storing them. It seeks to establish a unified regulatory framework. This regulation describes crypto-assets as digital representations of value or rights that are electronically transferable and storable. It classifies them into utility tokens, asset referenced tokens, and electronic money tokens, thus effectively encompassing crypto-assets that are currently not regulated by existing financial services laws.

Expected Impact on Switzerland and other Non-EU Countries

MiCA impacts Switzerland and any other non-EU country provided they host crypto-related businesses in EU countries. As such, Swiss companies will need to evaluate whether they fall under the MiCA provisions and if they possess the required license.

Conclusion

MiCA's influence on CASPs is expected to be significant, potentially resulting in extended and challenging implementation phases. Despite potential obstacles, the industry is optimistic and prepared to face the challenges from both practical and legal perspectives.

Edited by Jonathan Stoker