European Union regulators have released new guidelines allowing relevant market participants to classify cryptocurrencies and digital assets in accordance with the Markets in Crypto-Assets (MiCA) Regulation.
On July 12, three European supervisors - the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority - published a consultation document aimed at standardizing and clarifying the classification of digital assets across the region.
Crypto classification according to MiCA
The newly released guidelines provide a structured approach to classifying different types of crypto assets.
This involves determining whether a token is subject to MiCA using clues based on questions such as who the issuer is, whether it is blockchain-based or whether it is a type of financial instrument.
It also helps determine whether the token in question qualifies as a standard cryptoasset under MiCA or whether it can be classified as another type of asset, such as an electronic money token (EMT) or an asset-linked token (ART).
Issuers of ART must include in their official documents a legal opinion clearly explaining the classification of these tokens. The conclusion must confirm that the tokens are neither EMT nor any other type of crypto-asset excluded from the scope of the MiCA.
For crypto assets that do not fall under the ART or EMT categories, white papers must include an explanation indicating their classification.
EU MiCA Compliant
The guidelines ask market stakeholders to submit any comments related to the consultation document by mid-October, with a virtual hearing to take place on 23 September.
Patrick Hansen, senior director of EU strategy and policy at Circle, posted on X calling the recommendations "very helpful" and said he had already seen "a lot of people misclassifying tokens under MiCA."
Circle was one of the first stablecoin issuers to comply with MiCA, meaning that USD Coin (USDC) and Euro Coin (EURC) are now compliant under the new rules.
The first set of MiCA rules came into force on June 30 and is focused on stablecoins and their issuers. The next set of MiCA rules are expected to come into force by December 2024.
The Cardano Foundation (ADA) has published sustainability metrics for the upcoming MiCA requirements six months before they go into effect.
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