The European Union is constantly working to improve legislation in the field of regulation of the crypto industry. MICA regulation is a unique legislation that sets the global standard for regulating cryptocurrencies. According to this regulation, control over the provision of services with cryptocurrency in the European Union will be carried out. It is aimed at controlling the usefulness of cryptocurrency providers. It includes requirements for the issuance of virtual currency, the provision of fiat funds, and digital coins, which are based on the blockchain.
Assets exempted from regulation
MICA has excluded the following assets from regulation. It regulates NFTs and similar assets with unique characteristics. The code is designed in such a way that it does not control assets that are unique and that are not interchangeable with other assets, including electronic art, collectibles, and real estate guarantee.
It regulates crypto funds issued by the bank. Also, virtual funds allocated by the Central Bank, acting as a credit regulatory authority of the state and on crypto funds administered by the rules, will not be controlled. It covers non-transferable assets accepted only by the issuer but cannot be directly transferred to other holders.
Requirements for issuing assets
The regulation introduced requirements for issuers of assets, with specific rules for each type of crypto asset. Strict conditions have been created for digital money and Tokens based on increased risks for the financial system.
Whitepapers for cryptocurrencies
For the issuance of cryptocurrencies (excluding Digital Coin Tokens and Tokens linked to funds), the issuer must notify the regulator and publish the relevant document with the required information.
They must contain reliable information corresponding to the official cryptographic tool document.
Control by competent authorities
Such oversight reduces the administrative burden of publishing a whitepaper; there is no need to obtain confirmation of a cryptocurrency whitepaper before it is published.
It has created requirements for holding assets acquired during the ICO process, providing a refund. For this, third parties are involved.
Control of services related to cryptocurrencies
It has created requirements for CAPS and services tied to crypto assets. The regulation determined that CAPS services may contain decentralized components, but completely decentralized projects are removed from control. Let’s consider what services linked to cryptocurrencies are controlled.
It is a service for regulating a unified system for purchasing and selling assets by established requirements.
Exchange of crypto assets
Such an exchange is a contract for the purchase/sale of cryptocurrencies with third parties for money using their capital. In turn, CAPS are required to:
- give reliable data ;
- execute the client’s order;
- provide clients with data about requirements;
- publish completed transactions with prices.
This approach provides complete control over the concluded deals.
Storage and management of cryptocurrencies
This service involves the storage or control by third parties of cryptographic means or providing access to them through keys. CAPS creates a list that indicates clients’ rights to assets and various actions on behalf of their clients.
Transfer of cryptocurrencies
This service involves the transfer of assets from one blockchain address or account to another. And this is possible without opening the digital vault for the CAPS client.
Placement of cryptocurrencies
It is the marketing of the provider of cryptocurrencies to the buyer. CAPS has the right to place crypto assets; before that, it must get permission from the issuer or third parties.
Requirements for CASP
MICA has created new requirements for organizations that plan to provide services related to cryptocurrencies. We list the main requirements:
- to all employees and shareholders;
- for the provision of financial services;
- on the size of the minimum capital;
- to domestic policy;
- for issuing passports and attracting clients from other countries;
- to start activities.
Such control allows you to optimize cryptocurrency transactions, ensuring transparency and reliability.
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