With the Markets in Crypto Assets (MiCA) regulatory framework set to take effect by year-end, Italy, Belgium, and Poland, are unprepared to align their national laws with the framework.
Markets in Crypto Assets (MiCA), the landmark cryptocurrency regulatory framework within the European Union is approaching the deadline for its implementation by the year-end. However, with just three weeks remaining before December end, a quarter of the 27 EU member nations seem unprepared to implement the rules.
For implementing the MiCA rules in a country, the national legislation must align with the EU’s regulatory framework. The report from the Electronic Money Association shows that countries such as Italy, Belgium, Poland, Luxembourg, Portugal, and Romania have yet to make the necessary legislative adjustments.
As a result, the crypto industry trade associations have raised concerns over the lack of readiness, while criticizing EU authorities such as the European Securities and Markets Authority (ESMA) and the European Commission for stressing the year-end deadline of implementation, despite the gaps in compliance among the EU member states.
Robert Kopitsch, co-founder of Blockchain for Europe admitted that “the implementation of MiCA into national law is not going the way it should”. The implementation of the MiCA rules in the crypto industry shall happen in two phases.
The first implementation phase was in June when the stablecoin operators had to ensure the correct authorization in order to operate in EU member states. The December deadline focuses on crypto asset service providers (CASPs), including wallet providers, exchanges, and custodians. In order to apply for a MiCA license, the crypto firms should register and establish a presence in at least one EU member state. This allows them to operate later across the trading bloc.
Industry Groups Share Concerns about MiCA Implementation Deadline
Crypto industry trade associations have raised concerns about the limited timeframe national regulators have had to prepare for the Markets in Crypto Assets (MiCA) framework. These groups noted that the short interval between the October finalization of the regulatory standards along the December deadline has left regulators scrambling to manage the resulting administrative workload. A joint letter sent to the European Securities and Markets Authority (ESMA) last month notes:
“Under such time pressure it will be very difficult for the responsible NCA to manage the CASP application properly which is crucial for launching effective supervision based upon a well-established regulatory relationship.”
The trade groups have proposed a six-month “no-action” period to delay enforcement. Such a step would allow crypto firms, yet to receive authorization, to continue operations without incurring sanctions. However, ESMA has denied the request, though it is expected to address the MiCA deadline at a meeting on December 11.
Blockchain for Europe’s Martin Kopitsch warned that the lack of regulatory relief could force crypto firms to move out of Europe. He said:
“If you don’t have a license by a certain date you need to basically stop your services in Europe. Imagine what that means. Very bad for business and users will be upset. And it doesn’t make the EU look good.”
As per the Electronic Money Association (EMA), even Germany, known for its advanced crypto asset regulations, faces challenges aligning with the Markets in Crypto Assets (MiCA) framework. Germany’s existing crypto rules require new legislation to meet MiCA specifications, a process that takes time.
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