Markets in Crypto-Assets Regulations or MiCA are rules that seek to provide regulatory clarity for firms engaged in the digital asset markets. This includes non-security crypto assets as well as stablecoins. Digital securities are regulated under different rules.
In a corporate statement, payments firm Clear Junction says a recent survey indicated that compliance and clarity of rules under MiCA is a big concern for payments firms.
Their research polled 150 payment industry executives who gleaned the following information:
- 37% of payment leaders find understanding which regulatory requirements are relevant to them to be their biggest challenge.
- 20% struggle with understanding whether they need to be authorized or not.
- 24% find the authorization process difficult.
- 20% report difficulty in understanding compliance requirements during the Grandfathering period.
The survey was initiated during a “masterclass” held by ClearJuncition that reviewed MiCA. Clear Junction shared takeaways from the session;
- A unified regulatory framework is a double-edged sword: MiCA’s inflexible nature means that member states cannot alter or choose their own regulatory measures. While this approach eliminates the inconsistencies of national regulations, it removes the flexibility that companies once had to adapt to local nuances. This creates both clarity and limitations for businesses operating across the EU.
- Stringent requirements on stablecoins: MiCA places significant emphasis on Asset-References Tokens (ARTs) and Electronic Money Tokens (EMTs), commonly known as stablecoins. The regulation introduces strict requirements for stablecoin issuers, including robust reserve backing, transparency, and governance. Payments companies relying on stablecoins must ensure these assets meet the new standards, impacting everything from operational processes to customer offerings.
- Challenges for non-EU companies: MiCA presents a significant challenge for non-EU companies. Starting 30 December 2024, crypto-asset service providers outside the EU must secure MiCA authorisation to continue operating in the EU market. This transition period, known as the Grandfathering period, runs until 1 July 2026. Non-EU businesses will need an EU presence to continue and expand their operations in the region. While options like reverse solicitation or national exemptions exist, they offer limited solutions.
Dima Kats, CEO and Founder of Clear Junction, sees needed clarity as an opportunity for firms to establish themselves as trusted partners as payments firms navigate the “complexities” of MiCA.
Dima said:
“Crypto is no longer a speculative frontier; it is now a legitimate and integral part of the financial landscape, and MiCA lays down the rules for that legitimacy. With more deadlines fast approaching, businesses must ensure to understand the regulations and their obligations.”