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Published: August 27, 2024
Welcome to the world of MiCAR, where the European Union (EU) is setting the stage for a more transparent, secure, and stable crypto market. Short for “Markets in Crypto-Assets” Regulation, MiCAR was introduced in 2023, and it’s here to shake things up in the crypto world across EU member states.
Imagine a world where the crypto-asset market isn’t the Wild West, but a place where rules bring order and trust. MiCAR aims to make this vision a reality. Here’s a snapshot of what MiCAR is bringing to the table:
MiCAR isn’t just throwing a blanket over the entire crypto landscape. It’s zeroing in on specific types of tokens:
Tokens pegged to the value of another asset, (e.g. commodities or stablecoins).
Think stablecoins backed by a single fiat currency, such as the Euro.
Utility tokens that give you access to a good or service are also on MiCAR’s radar.
MiCAR is setting its sights on several key players in the crypto world:
If you’re launching a new crypto-asset, MiCAR’s got you in its crosshairs.
Crypto exchanges operating within the EU are now under the MiCAR microscope.
If you’re holding crypto assets on behalf of clients (think wallets), it’s time to take notes.
Offering crypto-asset advice or management? MiCAR wants a word with you.
(Click for more information)
Change doesn’t happen overnight, and MiCAR knows it. That’s why there’s a transitional period allowing everyone to get their ducks in a row:
To keep the crypto world in check, MiCAR lays down the law on five key requirements:
| Requirement | Description |
| Clear Disclosure | Detailed information about crypto offerings and processes |
| AML Compliance | Adherence to strict Anti-Money Laundering standards |
| KYC Standards | Know Your Customer protocols to ensure the legitimacy of users |
| Market Integrity | Rules to prevent market manipulation and ensure fair trading |
| Consumer Protection | Safeguards to protect consumers from fraud and mismanagement |
While MiCAR is a game-changer, it’s not without its hurdles. Financial institutions may face several challenges in aligning with MiCAR’s requirements:
By understanding these challenges, financial entities can take proactive steps to mitigate risks and prepare for the uncertainties presented by MiCAR. This includes keeping a close eye on EU developments, aligning internal practices with potential future UK regulations, and advocating for clear and internationally coordinated crypto regulations.
MiCAR is the EU’s bold step towards a more regulated, transparent, and consumer-friendly crypto market. Whether you’re an issuer, a trading platform, a custodian, or an investment service provider, it’s time to get familiar with MiCAR and gear up for the changes ahead. The crypto market is evolving, and with MiCAR, it’s set to be a thrilling ride toward a more secure and stable future.
First Derivatives is at the forefront of financial regulations, offering unparalleled expertise in gap assessments and remediation solutions tailored to your unique needs. Our comprehensive services ensure operational resilience and regulatory compliance, safeguarding your business in a rapidly evolving financial landscape. With a rich portfolio in business analysis, development, testing, and quality assurance, we empower clients to navigate and conquer compliance challenges, securing long-term success and stability. Choose First Derivatives for a partner who not only understands the complexities of financial regulations but also excels in transforming them into opportunities for growth and resilience.
We would welcome to opportunity to speak to capital market firms on these key topics, to share our thoughts and insights.
Pritesh Solanki
Managing Consultant
First Derivative
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Provides capital markets, programme management expertise to our industry-leading banking clients: MiFID II, SFTR, FATCA, SEC SBSD and CFTC.
Currently managing the SFTR Remediation at US Tier 1 IB.
Highly experienced Financial Services professional, possessing strong commercial aptitude and client management skills. Brings strong remediation and operational experience working in the transaction reporting domain with main focus on EMIR.
Brings 20+ years’ experience and knowledge in Financial Services focused on regulatory change in capital markets. Trade and Transaction Reporting SME in EMIR and MiFID.
