Regulation
How European regulators are fighting to attract crypto companies before MiCA goes live – DL News
- EU countries can use national rules to attract crypto projects.
- Some countries are ahead of others heading into MiCA.
- The December deadline may be extended in certain circumstances.
As the European Union’s crypto rules approach their effective date, regulators and crypto companies are running out of time to plan for this revolutionary regime.
In less than 12 months, the Markets in Crypto Assets Regulation, or MiCA, will allow crypto companies to apply for a license in one EU member state and gain access to all others.
This means crypto platforms can instantly do business in the $19 trillion European market.
But this opportunity raises a big question: which country should a crypto company set up shop in?
Attracting Crypto Businesses
Finding answers is difficult because national regulators have free rein to adapt their own rules under MiCA, and many are developing ways to attract crypto companies.
“If a country already has experience running a specific type of services, it makes perfect sense for it to continue attracting those services,” said Elizaveta Palaznik, an independent consultant specializing in MiCA. DL News in a live interview.
Luxembourg, for example, is already attractive for investment funds, Palaznik said. The grand duchy bordering France and Germany hosts 3,600 investment funds, so crypto funds are also flocking there.
The plan of Ireland
Irish regulators are known to be friendly to big tech companies and digital finance. This is why companies such as Coinbase and Ripple have chosen to set up shop in Dublin ahead of MiCA coming into effect, which will begin at the end of this year.
Join the community to receive our latest stories and updates
France has attracted trading platforms and exchanges, Palaznik noted. And Malta has designed Web3 gaming platforms.
Indeed, France and Malta have already implemented regimes similar to the MiCA. So, companies registered there may have less difficulty obtaining crypto licenses when MiCA goes live.
MiCA was passed last summer after years of negotiations between lawmakers and is considered the first comprehensive, bespoke crypto regulation in a major jurisdiction. Regulators are preparing to implement the new laws over the coming months.
” Grandfather “
MiCA’s crypto licensing regime is set to come into force on December 30. However, a provision in the regulations allows European countries to choose whether or not to give crypto companies an additional 18 months to adapt. This is called the “grandfathering” period.
Companies already registered with the regulator have an additional period during which they can offer their services nationally and prepare for the new, stricter licensing regime.
At the latest, crypto platforms will have to comply with MiCA by July 1, 2026, if a country opts for the full 18-month period.
“I heard rumors that in Luxembourg, regulators would move from 6 p.m. to 12 p.m. [months]”, Palaznik said, adding that Ireland and Austria had also opted for an additional 12-month transition period.
Lithuania will not, however, offer an additional transition period to crypto companies. Lithuanian authorities said in December that they were strengthening crypto requirements “in order to manage risks.”
The European Securities and Markets Authority, which oversees the implementation of MiCA, in October urged national authorities to minimize the grandfathering period and limit it to 12 months.
“Some regulators, to my knowledge, of course really want this December 30 deadline to be certain for crypto companies,” Palaznik said. “So companies already know what they need to do. »
Watch the full conversation between DL News” Regulatory correspondent Inbar Preiss and Elizaveta Palaznik here: