Regulators in the European Union (EU) have issued new guidelines allowing relevant market participants to classify cryptocurrencies and digital assets under the Markets in Crypto-Assets Regulation (MiCA).
On July 12, three European Supervisory Authorities (ESAs) — the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA) — released a consultation paper intending to standardize and clarify the classification of said assets across the region.
Crypto classification under MiCA
The newly released guidelines provide a structured approach to classifying various types of crypto-assets.
This includes determining whether a token falls under MiCA through question-based prompts, such as who the issuer is, whether it is based on the blockchain or whether it is a type of financial instrument.
It also helps determine whether the token in question qualifies as a standard crypto-asset under MiCA or if it could be classified as another type of asset, such as an e-money token (EMT) or an asset-referenced token (ART).
Issuers of ARTs must include a legal opinion in their white papers, clearly explaining the classification of these tokens. The opinion should confirm that the tokens are neither Electronic Money Tokens (EMTs) nor any other type of crypto-asset excluded from the scope of MiCA.
For crypto-assets that do not fall under the categories of ARTs or EMTs, the white papers must include an explanation outlining their classification.
Related: OKX selects Malta as MiCA hub for EU crypto compliance
EU MiCA compliance
The guidelines are inviting market stakeholders to submit any comments related to the consultation paper by mid-October, with a virtual hearing to be held on Sept. 23.
Patrick Hansen, the senior director of EU strategy and policy at Circle, posted on X called the guidelines “very helpful” and said that he has already seen “many people getting token classifications wrong under MiCA.”
Circle was one of the first stablecoin issuers to comply with MiCA, meaning that its (USDC) and EURC are now regulatory compliant under the new rules.
This follows the first set of regulations under MiCA coming into force on June 30, which targeted stablecoins and stablecoin issuers. The next set of MiCA regulations to come into effect are anticipated by December 2024.
The Cardano Foundation, which oversees the ADA (ADA) cryptocurrency, released sustainability indicators in compliance with the forthcoming Markets in Crypto-Assets (MiCA) six months prior to them coming into effect.
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