MiCA (Markets in Crypto-Assets) is an EU regulation governing the issuance of crypto-assets and the provision of related services. This legislation aims to establish an EU-wide legal framework for the crypto-asset market and to strengthen consumer protection, with the overall intention of increasing the transparency and security of crypto investments and enable a more efficient implementation of blockchain technology in financial markets.
MiCA is a response to the growing importance of cryptocurrencies and tokenisation. Previous financial market regulation has proved inadequate to the task, lacking uniform and precise rules, which led to regulatory arbitrage and an inconsistent approach to crypto-assets across the EU.
The MiCA Regulation aims to change all of this, primarily via the introduction of detailed rules for the information and protection of customers and the licensing of entities involved in the issuance or trading of crypto-assets. It is therefore expected to eliminate dishonest or unreliable entities from the market, thereby increasing transparency in the industry and trust in the products offered.
Crypto-assets in practice
MiCA represents a breakthrough for the financial sector, as it will lead to a strengthening of the synergies between traditional banking and blockchain technological innovation.
The regulation regulates three types of crypto-assets that, in the near future, will become increasingly common.
The first is the so-called ARTs, or asset-referenced tokens.
These are assets linked to a basket of currencies, commodities, crypto-assets, or a combination of these. To date, the best-known example of these is Diem/Libra, a would-be stablecoin project being developed by Facebook.
The second type of tokens regulated in the MiCA are the so-called EMTs, or electronic money tokens. In practice, an EMT involves pegging a token to the exchange rate of an official currency that is legal tender (such as the złoty or the euro). An example of such asset is the USDC, a token linked to the US dollar.
The third group of tokens regulated in the MiCA are the so-called utility tokens – tokens reflecting the right to access a good or service provided by the issuer. In practice, such tokens will take the form of a voucher, or discount coupon.
What about existing solutions?
MiCA will entail a new comprehensive regulatory regime for the crypto-asset market across the EU.
However, as the existing financial markets legislation partly covers also the crypto-actives area, it will be necessary to repeal those regulations that potentially conflict with the MiCA.
The second important element will be to assign specific supervisory powers to the competent authorities. In Poland, this is likely to be the Financial Supervision Authority (KNF).
Indeed, the new regulations are intended to be complementary to existing regulations, strengthening them and supplementing them where necessary.
For example, the existing consumer protection regulations will remain in place, but MiCA will introduce additional safeguards specific to the crypto market, including the requirement to provide information on token issuers and trading platforms.
Furthermore, MiCA will interact with existing anti-money laundering and combating the financing of terrorism (AML/CFT) regulations.
The regulation of crypto-assets also aims to ensure financial stability by introducing capital requirements and risk management procedures for providers of related services. In this way, MiCA complements existing financial stability regulations.
How can MiCA influence the financial market in Poland?
MiCA can significantly impact the Polish financial market.
The unification of regulations across the EU means better conditions for companies that are already active in the crypto sector, and, at the same time, an incentive for entities, including foreign ones that are only just considering investing in the Polish market. Clear rules for doing business and transparent regulations mean less legal risk and at the same time an opportunity to increase competitiveness and innovation.
In the area of crypto-assets, the Polish financial sector is showing great potential and readiness for cooperation. Banks and financial institutions are already experimenting with blockchain and crypto technology. MiCA implementation can accelerate these processes, giving confidence that operations will comply with European standards and be free from the influence of regulatory arbitrage.
Polish customers are increasingly willing to use cryptocurrencies, seeing them as modern and convenient payment or investment solutions. However, many issues are still unresolved, especially in the context of the crypto-assets bill, which is still at the consultation stage. There is limited time for its adoption, which in turn may increase uncertainty, both among customers and crypto issuers and traders.
In summary, the Polish financial market has significant potential in the area of crypto, which may translate into its rapid technological transformation and internationalisation.
Customers are also a factor that must not be forgotten. They are used to modern solutions in the areas of banking, payments and investment and are therefore open to using better, faster and cheaper finance. And this is what cryptocurrencies can provide. Today, however, much depends on the final shape of the crypto-assets act and the timing of its adoption.
