The regulatory framework protects investors and preserves financial stability, while allowing "innovation and fostering the attractiveness of the cryptoasset sector." 

Regulating the risks related to cryptoassets

MiCA will protect consumers against some of the risks associated with the investment in cryptoassets, and help them avoid fraudulent schemes. At present, consumers have limited rights to protection or redress, especially if the transactions take place outside the EU. With the new rules, cryptoasset service providers will have to respect requirements to protect consumers wallets and become liable in case they lose investors’ cryptoassets. MiCA will also cover any type of market abuse related to any type of transaction or service, notably for market manipulation and insider dealing.

Actors in the cryptoassets market will be required to declare information on their environmental and climate footprint. The European Securities and Markets Authority (ESMA) will develop draft regulatory technical standards on the content, methodologies and presentation of information related to principal adverse environmental and climate-related impact. Within two years, the European Commission will have to provide a report on the environmental impact of cryptoassets and the introduction of mandatory minimum sustainability standards for consensus mechanisms, including the proof-of-work.

MiCA does not duplicate the anti-money laundering provisions set out in the newly updated transfer of funds rules agreed on 29 June. However, MiCA requires that the European Banking Authority (EBA) will be tasked with maintaining a public register of non-compliant cryptoasset service providers. Cryptoasset service providers, whose parent company is located in countries listed on the EU list of third countries considered at high risk for anti-money laundering activities, as well as on the EU list of non-cooperative jurisdictions for tax purposes, will be required to implement enhanced checks in line with the EU AML framework. 

A framework for stablecoins 

MiCA will protect consumers by requesting stablecoins issuers to build up a sufficiently liquid reserve, with a 1/1 ratio and partly in the form of deposits. Every stablecoin holder will be offered a claim at any time and free of charge by the issuer, and the rules governing the operation of the reserve will also provide for an adequate minimum liquidity. Furthermore, all stablecoins will be supervised by the EBA, with a presence of the issuer in the EU being a precondition for any issuance.

The development of asset-referenced tokens (ARTs) based on a non-European currency, as a widely used means of payment, will be constrained to preserve the EU's monetary sovereignty. Issuers of ARTs will need to have a registered office in the EU to ensure the proper supervision and monitoring of offers to the public of asset-referenced tokens.

EU-wide rules for cryptoasset service providers and different crypto assets:

Under the provisional agreement, cryptoasset service providers (CASPs) will need an authorisation in order to operate within the EU. National authorities will be required to issue authorisations within three months. Regarding the largest CASPs, national authorities will transmit relevant information regularly to the European Securities and Markets Authority (ESMA).

Non-fungible tokens (NFTs), i. e. digital assets representing real objects like art, music and videos, will be excluded from the scope except if they fall under existing cryptoasset categories. Within 18 months the European Commission will be tasked to prepare a comprehensive assessment and, if deemed necessary, a specific, proportionate and horizontal legislative proposal to create a regime for NFTs and address the emerging risks of such new market.