The Markets in Crypto-Assets regulation, known as MiCA, is the European Union’s first comprehensive crypto regulation framework, set in place across the EU.
MiCA was approved by EU Parliament in April of 2023 and has been applicable since December 2024, with a transitional period extending through to 2026, allowing companies time to align with the new regulations.
With 2026 almost upon us, and with some countries like Sweden choosing to accelerate the transition period, it’s important for companies to understand how to best navigate the regulatory landscape.
What is MiCA?
MiCA’s main aim is to regulate crypto-asset issuance and services, including introducing licensing and a supervisory regime for issues of crypto-assets, crypto platforms and crypto-asset service providers (CASPs).
A crypto-asset is a digital representation of value or rights transferred and stored electronically, according to the European Commission’s glossary. As crypto-assets and currencies such as Bitcoin and Ethereum have become more widely used in the past decade, with the current global cryptocurrency market cap sitting at USD $3.53 trillion, regulators’ concerns over potential abuse have grown in tandem.
Those who will be most affected by MiCA are issuers of crypto-assets and the providers of crypto asset services as well as individual people dealing in crypto assets.
Taken all together, legislation around regulating crypto currency, which eventually led to MiCA, began around 2018.
What are the different stages of MiCA?
The regulation was first published in June 2023 in the Official Journal of the European Union.
Then followed a 12-month period before a change in rules started to be undertaken. By June 2024, the European Securities and Markets Authority (ESMA), in cooperation with the European Banking Authority (EBA), developed draft delegated acts and rules which began to apply for stablecoins – digital currencies that are pegged to a commodity or fiat currency. At that time, asset-referenced tokens (ARTs) and E-money tokens (EMTs) were to become authorized with white papers explaining the legality and finances behind them in order to meet the new standards.
By December of the same year, the rest of the regulations came into play. A grace period was established between December 2024 and July 2026 for all EU CASPs to comply with the regulations.
Come July 2026, it will be mandatory for all companies to fully comply with the MiCA regulation. This means that all CASPs will need to be MiCA authorized to legally operate, with stablecoin issuers complying fully to regulations.
If regulations are not met, there’s a risk that companies could be forced to shut down and/or be barred from the EU market.
Why it’s important for companies to follow regulations and protect themselves
With an estimated USD $24 billion in illicit transactions involving cryptocurrencies in 2023, companies should take it upon themselves to be aware of the dangers and the regulations that are designed to help protect them.
The MiCA regulations aim to create more transparency within the market and protect investors, specifically focusing on three crypto asset classes: asset-referenced tokens (ARTs), e-money tokens (EMTs) and other crypto assets not in previous regulations.
With the regulations in place, however, companies must take it upon themselves to implement and follow the rules.
Trapets, a Swedish financial crime prevention organisation, will host a webinar focusing on the key elements of the MiCA regulation on Thursday, 22 May from 09:00 – 10:00 CEST.
Speakers include Per Friberg, Senior Financial Crime Surveillance Officer at Trapets; and Amin Bell and Axel Schelén, a Partner and Associate, respectively, at Stockholm-based law firm Harvest.
The financial and legal experts will provide attendees with an overview of MiCA and its implications; a deeper dive into MiCA’s market abuse regulations with a focus on CASPs; a detailed comparison with the existing Market Abuse Regulation (MAR); as well as key takeaways and insights surroudning compliance strategies.
As with other sweeping regulations, such as the GDPR, MiCA has a lot of information and rules for businesses to navigate. While initially difficult to maneuver, it’s expected that, with time, MiCA regulations will become commonplace for crypto-asset related companies. But in the meantime, European businesses must do their homework.
