Patrick Akiki
Partner, Financial Services Market Leader, PwC Switzerland
On Thursday 20 April, the European Parliament voted in favour of the Markets in Crypto Assets (MiCA) legislation, signalling a new era for the cryptocurrency industry across the 27 EU member states. The important vote in Strasbourg received strong support, with 517 approvals, 38 objections and 18 abstentions.
MiCA establishes one of the most extensive regulatory frameworks for digital assets to date, aiming to create a cohesive approach to crypto asset regulation across all EU member states. With this legislation, businesses approved in one member state can "passport" their operations into another, streamlining cross-border activities. With the EU's history of setting global standards, MiCA may become a benchmark for policymakers worldwide, making it even more relevant for the global crypto industry.
The legislation imposes several requirements on crypto asset issuers and service providers, focusing on transparency, disclosure, authorisation and supervision of transactions. These measures will not only provide legal certainty for market participants but also ensure consumer protection and financial stability.
Key requirements
Under the MiCA framework, key requirements for crypto asset issuers and service providers include:
All issuers:
- Publish a whitepaper (incl. technical information, financial condition risk and ESG disclosures)
- Conduct, organisation and technical requirements
For stablecoin issuers:
- Authorisation regime
- Robust governance arrangements, systems and controls
- Segregated client funds and regular reserve audits
Crypto Asset Service Providers:
- Prudential and capital requirements (service dependent)
- Liability for loss of funds (custodians)
- Market abuse regime (insider trading, market manipulation controls, etc.)
- Best execution / conflicts of interest
- Segregated client account records
- Fit and proper management
- Registration in an EU member state
- Complaints handling procedure
What are the next steps?
MiCA will not become applicable immediately, providing both companies and member states with some breathing room to adapt to the new regulations. A final vote by the European Council is due to take place in mid-June, after which it is expected that MiCA will come into force in July 2023. The provisions concerning stablecoins will then apply from July 2024, with the remaining requirements then becoming applicable from January 2025.
Stay tuned for our upcoming publication, which will provide our analysis of MiCA and its implications for the crypto industry. This publication will deliver key considerations for crypto asset service providers and financial institutions seeking to adapt to the rapidly changing regulatory environment of digital assets.
What support can PwC provide?
Leveraging our extensive European network, direct access to regulators and deep industry experience, PwC is uniquely positioned to assist our clients throughout their entire journey, helping them navigate the challenges and seize the opportunities that MiCA presents.
- Tailored regulatory strategy development, considering business objectives, risk appetite and resource allocation
- Jurisdiction analysis and selection, advising on the optimal legal structure and assistance with company registration and EU passporting
- Assistance with licensing and authorisation, including application document preparation and submission
- Effective coordination and communication with regulators and authorities
- Comprehensive impact and gap assessments, followed by a prioritised MiCA-aligned roadmap
- Ongoing monitoring and analysis of MiCA developments, ensuring agile client adaptation
- Organisational and operational adaptation guidance and implementation, including internal control frameworks, systems, procedures and technology solutions
Contact us
Partner, Head Asset & Wealth Management and Banking Regulatory, Legal, PwC Switzerland
Tel: +41 58 792 43 94
Director, Business, Regulatory and Digital Asset Transformations, PwC Switzerland
Tel: +41 79 238 62 78