MiCA Regulation: Comprehensive EU Framework for Crypto Activities

The Markets in Crypto-Assets (MiCA) Regulation covers a wide range of crypto-related activities within the EU. Here’s a breakdown of the key areas it regulates:

1. Crypto-Asset Issuers

• Covers entities issuing or offering crypto-assets to the public.
• Applies to three main types of crypto-assets:
  • Asset-Referenced Tokens (ARTs) (e.g., stablecoins pegged to multiple assets)
  • E-Money Tokens (EMTs) (e.g., stablecoins pegged to a single fiat currency like the euro)
  • Other Crypto-Assets (e.g., utility tokens)

2. Crypto-Asset Service Providers (CASPs)

• Regulates service providers offering:
  • Trading platforms (crypto exchanges)
  • Custodial services (crypto wallets)
  • Crypto-to-crypto and crypto-to-fiat exchange services
  • Advisory and portfolio management for crypto-assets
  • Order execution and placing of crypto-assets

3. Stablecoin Regulation

• Strict requirements for issuing and maintaining stablecoins (ARTs & EMTs).
• Large issuers may face additional oversight from the European Banking Authority (EBA).
• Restrictions on the use of stablecoins for payments if they pose a financial stability risk.

4. Market Abuse and Consumer Protection

• Rules against insider trading, market manipulation, and misleading advertising.
• Requires clear whitepapers and disclosures for token issuances.

What MiCA Does Not Cover

• DeFi (Decentralized Finance) → If fully decentralized with no identifiable service provider.
• NFTs (Non-Fungible Tokens) → Unless issued as fractionalized or used for investment purposes.
• Bitcoin & Other Fully Decentralized Assets → MiCA regulates service providers dealing with them, but not the assets themselves.

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