MiCA finally approved by the European Parliament: here’s what you need to know

In a significant move, the European Parliament finally voted on the Markets in Crypto Assets (MiCA) regulation on April 20. On the same day, it also approved the Regulation on the transfer of funds – which is called the “Travel Rule”.

MiCA brings conduct and prudential regulation for crypto-asset service providers (CASP). Meanwhile, the Travel Rule mandates the sending of user and originator information with crypto-asset transfers between CASPs, bringing them in line with fiat transfers. To learn more, you can read the previous updates we provided for both MiCA and Travel Rule.

Next steps and timeline

Now that MiCA has been approved by the European Parliament, it should now become European law. MiCA becomes a European law 20 days after it is entered in the Official Gazette (OJ). Normally, entry into the OJ would take place at the next available plenary session after plenary vote – so June. Therefore, we now consider that:

1. Obligations for asset and e-money token issuers will come into effect at the end of June 2024 – so 12 months after entry into force.
2. Most MiCA obligations relevant to cryptoasset service providers (CASPs) will become applicable at the end of December 2024 – so 18 months after entry into force.

It is also important that when MiCA comes into force, there are still a number of regulatory standards that must be issued by the European Securities and Markets Authority (ESMA) and/or the European Banking Authority (EBA) to provide details on how to meet some of the obligations .

These standards are called Level 2 measures and usually have to be agreed by the EU Commission. MiCA requires these regulatory standards to be provided by European supervisory authorities (ie ESMA and EBA) usually within 12 months of entry into force.

The EBA has also established two Industry Technical Expert Groups to provide input into their anti-money laundering (AML) responsibilities under the Fund Transfer Regulation. Elliptic Vice President of Policy and Regulatory Affairs David Carlisle is a member of one of those groups.

MiCA is a large piece of EU law that will take time for firms to adopt and understand. We at Elliptic’s GPRG team are always happy to communicate with clients about our understanding of these and other crypto-related regulations. Email mark.aruliah@elliptic.co.

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