Crypto regulation remains both a complex and controversial subject. The reason is that at present, there is still no clear and harmonized legal framework within the European Union. Certainly, the European Parliament has already adopted the MiCA crypto standard. Certain gray areas nevertheless persist. Hence the second consultation launched by ESMA, the European financial markets authority.
Crypto regulation, at the heart of ESMA’s mission
ESMA is the financial markets regulator of the European Union. Since the advent of the cryptocurrency market, it has taken particular interest in it. Generally speaking, ESMA’s mission is to protect investors (crypto or not). Its role is also to guarantee the integrity, transparency and proper functioning of financial markets.
In this context precisely, ESMA has just launched a second consultation on MiCA crypto regulations. This consultation aims to gather stakeholder views on the proposed technical requirements for the MiCA regulations. Remember that the MiCA crypto standards were promulgated in June 2023.
ESMA tackles technical aspects of MiCA law
The MiCA Regulation is a legislative proposal to create a harmonized framework for crypto assets within the EU. Concretely, it aims to establish clear and uniform rules for services related to cryptocurrencies. This includes :
- the exchange,
- the conversation,
- the transfer,
- the show.
The technical rules proposed by ESMA as part of this consultation specify the terms of application of the MiCA crypto regulation. More explicitly, the consultation covers 5 areas :
- sustainability indicators for distributed ledgers,
- disclosures of privileged information,
- technical requirements for white papers,
- transaction transparency measures,
- document retention and business continuity requirements for crypto-asset service providers (CSSPs).
A consultation open to the entire crypto community
The consultation is open until December 14, 2023. It allows players in the crypto industry to give their opinion on the technical rules proposed by ESMA. The comments collected during this consultation will indeed help ESMA to finalize its proposals for technical rules.
After December 14, the regulatory authority will publish a final report. Then she will submit crypto technical standards to the European Commission for approval. The deadline is June 30, 2024 at the latest. We also know that ESMA must publish a third consultation package in the first quarter of 2024.
Crypto regulation represents a major challenge for the future of financial markets (and not only in Europe). The consultation launched by ESMA thus offers stakeholders (especially crypto market players) a unique opportunity to participate in the development of this regulation.
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