The European Union’s financial watchdog, the European Securities and Markets Authority (ESMA), will launch a three-part consultation process for the recently adopted Markets in Crypto Assets (MiCA) framework. The consultations are expected to cover authorization, governance, conflicts of interest, and complaint handling procedures of MiCA starting in July 2023, subject to approval by the European Commission, European Parliament, and European Council.
MiCA was first proposed by the European Commission in September 2020 and approved by the Economic and Financial Affairs Council of the European Union in May 2023. The framework intends to establish a consistent regulatory environment for cryptocurrencies among the EU member states. The US has been criticized for taking a “regulation by enforcement” approach, and MiCA aims to provide regulatory clarity for crypto enthusiasts and businesses alike.
The first consultation package will include technical standards on the application of crypto asset service providers in the EU, procedures for handling complaints, and disclosing potential conflicts of interest. The second package, expected to begin around October, will address disclosures of information to investors, governance requirements for crypto firms, and sustainability indicators as well as adverse impacts on the climate.
The final consultation, set to take place in the first quarter of 2024, will likely consider investor protection and rules to counter market abuse. The MiCA framework has suggested an 18-month timeline to fully take effect, with all rules applying beginning December 2024.
With crypto industry leaders weighing which jurisdictions to conduct their business operations in, regulatory clarity around digital assets is often a prioritize issue in discussions. Ensuring smooth implementation for MiCA’s crypto-focused legislation is crucial in achieving consensus among EU member states on cryptocurrency regulations.
In conclusion, the MiCA consultation process aims to create an effective regulatory framework for cryptocurrencies within the European Union, enabling increased transparency, addressing potential conflicts of interest, and adhering to environmental concerns. This effort is essential to the future of digital assets in the EU and, if successful, may serve as a model for other jurisdictions seeking regulatory clarity in the ever-growing world of cryptocurrencies.
Source: Cointelegraph
