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MiCA

The Markets in Crypto Assets Regulation (MiCA) is a regulation of the European Union aimed at regulating the issuing of crypto assets and the operations of Crypto Asset Service Providers (CASPs) in the member states of the EU.

Brief History

Officially numbered as COM/2020/593 final, MiCA was first proposed on the 24 September, 2020, in response to Facebook (now Meta)‘s announcement of their Libra (later Diem) stablecoin project. The final draft was submitted to the European Council on 8 March, 2022, and a political deal to pass the regulation was announced on 30 July 2022. While the text of the final agreement has not been made public, it is expected to be close in content to the final draft. MiCA is expected to come into force in Q2 or Q3 2024.

Content and Scope

MiCA defines and creates regulations for two things:

  • Crypto Assets - defined as ‘Distributed Ledger Technology-based cryptographic tokens that are used as a medium of exchange’. MiCA lays down specific definitions of three subclasses of crypto assets:
    • Electronic Money Tokens - crypto assets that maintain a ‘stable’ value by referencing a single ‘real word’ fiat currency. Examples include Tether and STASIS EURO.
    • Asset-Referenced Tokens - crypto assets that maintain a ‘stable’ value by referencing anything other than a single fiat currency (i.e. two or more fiat currencies, one or more cryptocurrencies, one or more other assets such as gold or diamonds). Examples include PAX Gold and DIAM.
    • Utility Tokens - crypto assets whose main purpose is to gain access to a service provided by the same issuer that issued the token. Examples include Dusk, Filecoin and Binance Coin.
  • Crypto Asset Service Providers - defined as entities that engage in any of the following activities:
    • custody and administration of crypto assets on behalf of third parties
    • crypto exchange services (running an exchange)
    • ‘crypto advisory’ services, defined as advice on investing in crypto assets, NOT portfolio management

Dusk and MiCA

As an issuer of a crypto asset that is actively on the trajectory to work with regulated entities, Dusk pays a lot of attention to this regulation. As part of Dusk’s commitment to compliance, inclusion of MiCA principles must be built into our technology at the foundational level.

Understanding, translating, and explaining to our publics the meaning and implications of MiCA is a core part of Dusk’s thought leadership in the regulatory space. As such, we have already issued several pieces of content related to the regulation:

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