Compliance Briefing — May 16, 2023
The Council of the European Union adopted the Markets in Crypto-Assets Regulation (MiCA), finalizing the EU's harmonized licensing and stablecoin regime for crypto-asset service providers.
Executive briefing: On May 16, 2023, EU member states in the Council formally adopted the Markets in Crypto-Assets Regulation (MiCA). The framework introduces authorization requirements for crypto-asset service providers (CASPs), conduct rules, and robust reserve management obligations for asset-referenced tokens and e-money tokens.
Immediate compliance priorities
- Licensing strategy. Determine whether EU operations qualify as CASPs and prepare license applications with national competent authorities.
- Stablecoin readiness. For issuers, design reserve management, white paper, and governance programs that satisfy MiCA's ongoing obligations.
- Disclosure updates. Align white papers, marketing materials, and client disclosures with MiCA transparency standards and liability provisions.
Control alignment
- Risk management. Implement prudential safeguards, complaint handling, and operational resilience controls required for authorized CASPs.
- AML coordination. Integrate MiCA requirements with existing AML/CTF programs, including Travel Rule compliance under the revised Transfer of Funds Regulation.
- Third-country oversight. Establish governance for providing cross-border services into the EU under reverse solicitation limitations.
Enablement moves
- Engage supervisors early to clarify transitional arrangements before MiCA applies in 2024 and 2025 phases.
- Coordinate with product teams to embed MiCA guardrails into token issuance and exchange operations.
- Track ESMA and EBA regulatory technical standards detailing reporting, reserve composition, and authorization templates.
Sources
Zeph Tech supports digital asset firms with MiCA authorization, prudential planning, and cross-border compliance strategies.