After a considerable hiatus, both the European Commission and the European Council have, since last June, shown they are ready to take the lead in the crypto-assets regulatory scope, adopting what may be the most comprehensive regulation on the subject yet, namely the Markets in Crypto-Asset Regulation (MiCA).

At a glance, MiCA’s purpose is to establish the standards to regulate the issuance, or placement, and trading of distributed ledger technology backed assets. The expectations are that MiCA’s adoption will provide for a thorough delineation of the required framework in terms of governance and functioning for that market’s participants (e.g., issuers, services providers, their clients and holders of such assets).

The adoption of the MiCA, allied with the favourable environment fostered by the European Banking Authority (EBA), specially through the European Forum for Innovation Facilitators (EFIF), which grants us a generous foresight on the expected future in terms of FinTechs, innovation facilitators and hubs, by bringing forth ground-breaking proposals such as the AI Act legislative proposal, the DLT Pilot Regime, the EU Digital Finance Platform and the European Commission’s pan-European regulatory sandbox for DLT, as well as the continuous build-up of the European Blockchain Services Infrastructure, paints a picture of a welcoming ecosystem for the emerging market of distributed ledger technology backed products and services. 

This current regulatory panorama is expected to further advance the development of markets in sustainable finance and DeFi business models, providing not only the necessary framework, but also legal certainty where the applicability of the current EU financial services legislation falls short, setting forth standardised rules that will govern over, amongst other virtual representations of value and rights, crypto-assets, crypto-assets service providers, crypto-assets issuers and stablecoin issuers including, without limitation, subjecting or bringing them under the oversight of the European Banking Authority and the European Central Bank where required.

It is aligned with the goals of fostering the European values and regulations throughout the advancement of distributed ledger technology backed markets and services for the benefit of citizens, society and the economy, that Promethean is pleased offer its expertise and commitment towards realising its clients’ potential under this emerging cross-border ecosystem.