The European Securities and Markets Authority (ESMA) has issued final recommendations to facilitate the full implementation of the Markets in Crypto Assets (MiCA) law. This achievement is a key step toward establishing a single regulatory framework for the crypto-asset market across the European Union.
On December 30, MiCA, which started its phased deployment in mid-2024, will come into full force. The latest guidance intends to clarify remaining issues and assist EU member states in concluding regulatory modifications.
The ESMA report identifies 12 significant challenges, with a primary focus on defining digital assets, clarifying legal use, and preventing contradictory interpretations across member states. Regulators and stakeholders expressed concerns about imprecise criteria and potential administrative burdens in the initial drafts, prompting the development of this guideline.
One of the key points raised was the necessity for a widely understood definition of “financial instruments” under the EU’s Markets in Financial Instruments Directive II (MiFID II). While member states requested revisions to include cryptocurrency classifications, ESMA suggested revising existing rules without changing key definitions. This strategy seeks to maintain consistency while also addressing the distinct qualities of digital assets.
The guideline also clarifies regulatory criteria for combating market abuse and sets expectations for Crypto Asset Service Providers (CASPs). However, ESMA avoided offering real-world examples, emphasizing the significance of impartiality in directing national competent bodies.
Despite improvements, certain member states, including Belgium, Portugal, and Italy, have indicated difficulties in fulfilling the end-of-year target. These difficulties originate from the short time between the introduction of ESMA’s technical standards in October and the looming enforcement deadline.
To facilitate a smooth transition, ESMA has committed to continuous consultation with member states and will provide further assistance as needed. While the final report answers several regulatory issues, ESMA emphasized its willingness to further tighten recommendations to ensure consistent application across the EU.
The MiCA law is a groundbreaking effort to unify digital asset oversight, giving businesses greater certainty and creating a more secure environment for investors. We expect this final guideline to serve as the cornerstone for Europe’s unified and successful crypto regulatory framework as the December 30 deadline approaches.
