Crypto assets MiCAR - (part of the Digital finance package strategy)

Latest Developments

On 31 May 2023, Regulation (EU) 2023/1114 on Markets in Crypto-asset (hereinafter MiCAR) was adopted by the European Parliament and the Council, which entered into force on 29 June 2023 and will apply from 30 December 2024. EU Member States were empowered to set a transition period of up to 18 months from the application date (grandfathering). During such period, service providers were able to still rely on the authorisations/registrations granted under the preceding national VASP regimes. In many EU Member States, this grandfathering period has ended in course of 2025. Some EU Member States (including France and Italy, however, are in grandfathering period until 30 June 2026.

While being a new regulation, first changes have been proposed by the EU Market Integration Package.

Summary

MiCAR creates a specific harmonised regulatory framework across EU jurisdictions for issuers and service providers of crypto-asset services aiming to protect investors and end-users. For the first time, fungible and transferable crypto-assets (which are not transferable securities or other products covered by financial Regulation) are treated under a single set of rules across the EU.

MiCAR is a Regulation of maximum harmonisation, binding in all its elements and directly applicable in all EU Member States.

As part of the Digital Finance Package Strategy, it aims to address the need to drive and harness digital transformation within the EU financial sector by promoting new opportunities and tackling the risks and benefits to consumers and businesses, while ensuring an integrated and level playing field for existing and new market players.

In general terms, the objectives pursued by the EU co-legislators with Regulation (EU) 2023/1114 can be summarised as follows:

• Providing the legal tools to overcome the regulatory fragmentation in the EU and to regulate in a consistent manner the relations between all participants in the crypto-asset reference markets falling within its scope, bringing operators active in the market for crypto-asset services within the scope of a regulatory and supervisory framework;
• Providing an appropriate (macro and micro) financial risk control "regime" for crypto-asset activities which have so far been deregulated;
• Introducing rules derived from the financial sector to broaden the scope of investment opportunities in a regulated and supervised market; and
• Reducing the risk of regulatory arbitrage between economically similar activities by setting out a precise system of obligations and rights to protect the proper functioning of crypto-asset markets, which could become interoperable with traditional financial markets.

The Regulation on markets in crypto-assets considers the following types of crypto-assets within its scope:

1. E-Money tokens (EMTs) that are intended primarily as a means of payment aimed at stabilising their value by referring only to a single fiat currency. They can only be issued by credit institutions or e-money institutions and are redeemable on demand at the nominal value of the legal tender to which they refer;
2. Asset-Referenced tokens, (ARTs), intended to maintain a stable value by referencing several currencies that are legal tender, one or several commodities, one or several crypto-assets, or a basket of such assets. They could also be used as a means of payment. They can be issued by a legal entity established and authorised in the EU or by a credit institution and their market value is guaranteed by highly liquid financial asset reserves;
3. Crypto-assets other than EMTs or ARTs, covering a divers set of tokens, including utility tokens, intended to provide access to a good or service supplied by the issuer.

Non-Fungible Tokens that are unique and not fungible with other crypto-assets-  are excluded from the scope of MiCAR. It is important to understand that the use of a certain token standard (e.g. ERC-721) is not decisive for question whether a token is unique and not fungible. The decisive point are the rights and value attached tot the token.

Currencies issued in digital form by the European Central Bank or the central banks of the EU Member States (so-called CBDCs) are also excluded from the scope of the MiCAR.

The Regulation on Markets in Crypto-assets sets out: (1) rules for issuers and offerors of crypto-assets; and (2) rules for entities that provide services related to crypto-assets (exchanges, trading platforms, custodial wallet providers etc.), excluding activities performed exclusively through 'fully' decentralised systems/protocols.

Further information on MiCAR can be found here.

How could it be relevant for you?

MiCAR is relevant for you if you (i) issue/offer crypto-assets to the public and/or seek admission to trading of a crypto-asset; and/or (ii) provide services in relation to crypto-assets; and/or (iii) you are otherwise involved in acts concerning crypto-assets that are admitted to trading for crypto-assets.

MiCAR creates legal certainty for crypto-asset markets within the EU legal framework, establishing organisational and conduct requirements for participants, prudential rules for issuers of certain types of crypto-assets (namely e-money tokens and asset-referenced tokens), introducing specific investor protection provisions and other measures (for example, governance arrangements) aimed at maintaining the integrity of the market itself.

MiCAR establishes transparency rules for the offering/issuance (crypto-asset white paper requirement) and marketing of crypto-assets  and different authorisation pathways, depending on the entity type:

1. Through an authorisation procedure reserved for legal persons or other entities (other than financial intermediaries); or
2. A notification mechanism to the competent national authorities for financial intermediaries such as banks, central securities depositories, investment firms, regulated market operators, electronic money institutions, UCITS management companies or alternative investment fund managers;
3. Under a simplified procedure for entities authorised to provide crypto-asset services under national law on 30 December 2024. The simplified procedure will apply to applications for authorisation submitted between 30 December 2024 and 1 July 2026, as provided for in Article 143(6) (option left to individual Member States when transposing the Regulation into national law).

The set of these rules will facilitate the cross-border trading in crypto-assets and simplify the provision of services related to them in the EU through the so-called passport.

Next steps

MiCAR is fully in force. Entities providing crypto-asset services or issuing crypto-assets must now comply with all requirements. In some EU Member States (e.g. France and Italy), service providers licenced or registered before end of 2024 can still benefit from the national grandfathering regime (until 30 June 2024 by the latest).

Financial intermediaries wishing to enter the crypto-asset services market should prepare an analytical implementation plan to mitigate the risks of inadequate business model adaptations and allow sufficient time to review policies, processes and procedures to comply with MiCAR.

Further legislative developments should be monitored as the EU Market integration package already proposes changes to MiCAR (in particular, EMSA shall be appointed as central EU authority to supervise all CASPs).

*Information is accurate up to 2 February 2026