The Commission proposes new legislation on crypto-assets, a digital representation of values or rights that can be stored and traded electronically.
The ‘Regulation on Markets in Crypto Assets’ (MiCA) aims to boost innovation while preserving financial stability and protecting investors from risks. This shall secure legal clarity and certainty for crypto-asset issuers and providers. The new rules intend to allow operators authorised in one Member State to provide their services across the EU (“passporting”). Safeguards include capital requirements, custody of assets, a mandatory complaint holder procedure available to investors, and rights of the investor against the issuer. Issuers of significant asset-backed crypto-assets (so-called global ‘stablecoins’) would be subject to more stringent requirements (e.g. in terms of capital, investor rights and supervision).
The Commission is proposing a pilot regime for market infrastructures that wish to try to trade and settle transactions in financial instruments in crypto-asset form. The pilot regime represents a so-called ‘sandbox’ approach – or controlled environment – which allows temporary derogations from existing rules so that regulators can gain experience on the use of distributed ledger technology in market infrastructures while ensuring that they can deal with risks to investor protection, market integrity and financial stability. The intention is to allow companies to test and learn more about how existing rules fare in practice.
According to the updated Commission work program from 27 May 2020, a legislative proposal on crypto-assets will be issued in Q.3 2020. Previous activities of the Commission addressed aspects of the phenomena already, and invited stakeholders to comment on the regulatory aspects: