MiCA and the CySEC CASP regime in Cyprus
Aiming to enable a sustainable, regulated crypto-asset services ecosystem within the European Union (EU), for Crypto-Asset Services Providers (CASP), the European Commission (EC) has agreed to a fully harmonised regime which will result in a uniform single market for crypto-assets. The regime will allow for crypto-asset services to be offered on a cross-border basis across the EU member states, with enhanced levels of investor protection, market integrity, and financial stability ensured.
Throughout this commentary, the SALVUS Crypto-Assets team notes key information on the EU’s agreed regime, known as MiCA, and what the main considerations for CASP are, including:
- What is MiCA?
- What does the agreed EU deal mean for the crypto-asset services industry and how does it affect a CASP in Cyprus?
- What are the main difficulties of regulating crypto-assets?
- How SALVUS can help set up a CASP under CySEC
- What is MiCA?
MiCA refers to the Markets in Crypto-Assets (MiCA) regulation, amending Directive 2019/1937. It consists parts of the crypto-assets and distributed ledger technology (DLT) broader legal frameworks, prepared at the EU level. The proposed regulation is governed by the following objectives:
- provision of the legal basis for crypto-assets not covered by existing EU legislation,
- establishment of uniform rules for crypto-asset services providers and issuers at the EU level,
- replacement of existing national frameworks that apply to crypto-assets not covered by existing EU financial services legislation,
- establishment of specific rules for stablecoins, including the cases of them being e-money.
In this way, MiCA regulation aims to deliver uniform requirements concerning the authorisation, operation, organization, and governance of CASP and subsequently protect investors and market integrity from risks associated with crypto-assets.
The groundwork of MiCA was initiated in 2018 due to the increased public interest observed within the EU for investing in cryptocurrencies. The EC adopted a digital finance package, including MiCA in September 2020 which has led to extensive discussions among the preparatory bodies such as the EU Council, the European Central Bank (ECB), and the Economic and Social Committee. MiCA regulation is expected to come into force in 2023, in alignment with other regulations for anti-money laundering (AML) and tracing transfers of crypto-assets and complement the efforts of local regulators such as CySEC (Cyprus Securities and Exchange Commission) for the CASP registration regime.
Find the full article here: https://salvusfunds.com/2022/08/05/mica-and-the-cysec-casp-regime-in-cyprus/
