Markets in Crypto-Assets (MiCA) là gì?

Here is the English translation of the text, with the terms in <> retained as is:

MiCA is the abbreviation for "Markets in Crypto-Assets", representing a completely new legal framework for crypto-assets in Europe. This regulation brings order to the market, which has been likened to the "Wild West" - in order to protect investors, prevent fraud, and ensure smoother operations.

The MiCA journey began in 2018. With the rapid growth of the crypto-asset market in the late 2010s, the European Commission recognized the need for a unified approach to address the emerging challenges.

This led to the formal proposal of MiCA on 24/9/2020, as part of efforts to promote digital finance and protect consumers.

Why is MiCA necessary?

There are 3 main factors driving the need for MiCA:

• Regulatory consistency: Before MiCA, the lack of a clear legal framework had caused confusion and inconsistency among EU member states. Businesses faced difficulties in compliance, while consumers faced varying levels of protection. MiCA aims to create a level playing field, facilitating cross-border business and enhancing consumer protection measures.
• Investor protection: The proliferation of crypto-assets has led to an increase in fraudulent and deceptive practices. MiCA introduces strict transparency requirements, obligating crypto-asset issuers to clearly disclose risks, ensuring consumers have sufficient information before investing.
• Financial stability: The uncontrolled crypto-asset market has posed risks to the stability of the financial system. MiCA addresses this by establishing rules to prevent market manipulation and promote responsible innovation in this field.

MiCA Regulation Timeline

MiCA, the EU's legal framework for crypto-assets, was proposed in September 2020, passed in May 2023, and will come into full effect in December 2024. This regulation establishes comprehensive standards for crypto-asset service providers across the EU.

Key Parts of MiCA

MiCA consists of 7 main parts, covering regulations for crypto-assets and requirements for service providers, to legal responsibilities across jurisdictions.

MiCA Parts	Focus	Key Elements
Title I	Foundational Regulations	Rules for crypto-asset platforms, definitions of key terms, and scope of application.
Title II	Crypto-Asset Issuance	Requirements for issuing crypto-assets, whitepapers, and legal personality.
Title III	Asset-Referenced Tokens (ART)	Regulations for stablecoins, asset-backed tokens, and transparency.
Title IV	E-Money Tokens (EMT)	Rules for issuance, whitepapers, issuer responsibilities, and transaction regulations.
Title V	Authorized Providers	Authorized entities, cross-border service provision, and compliance requirements.
Title VI	Market Abuse	Prevention of insider trading, information leaks, and market manipulation.
Title VII	Regulatory Cooperation	Coordination between EU and national authorities, enforcement, and information sharing.

Title I of MiCA

Title I sets out the rules for platforms that publicly offer and trade crypto-assets. The content of this title specifies the requirements that these platforms must meet to operate legally within the EU, and includes 3 key points:

• Establishing requirements for the platforms and related organizations.
• Clearly defining the scope of application.
• Providing definitions for important terms such as Distributed Ledger Technology (DLT), Utility Tokens, consensus mechanisms, crypto-asset services, and many other concepts.

For example, when referring to "Utility Tokens," the regulation defines them as digital assets that grant users access to a specific application or service, such as tokens used to purchase items in a game or access certain features on a platform.

Title II of MiCA

Title II of MiCA regulates the requirements for organizations that want to create and publicly offer a crypto-asset. If an organization wants to issue a crypto-asset that is not an Asset-Referenced Token (ART) or an E-Money Token (EMT), the organization must meet the following key criteria:

• Legal Personality: The issuing organization must have legal personality, meaning it must be established under the laws of an EU member state and have the capacity to undertake legal actions.
• Whitepaper: A detailed whitepaper must be prepared and published, explaining the purpose, technology, and risks associated with the crypto-asset.
• Marketing Communications: Marketing materials must be published accurately, reflecting the true nature and intended use of the crypto-asset.
• Notification to Authorities: The organization must notify the competent authority in its member state of its plans to issue the crypto-asset, submitting the whitepaper (mandatory) and marketing materials (if requested).
• Additional Compliance: The organization must comply with any other specific requirements related to the provision of the crypto-asset.

Notably, these regulations do not apply to tokens awarded for work on a blockchain if they are provided free of charge. Additionally, Utility Tokens or tokens used solely for payment are not considered crypto-assets under MiCA.

Part III of MiCA

Part III of MiCA focuses on Asset-Referenced Tokens (ART), a type of crypto-asset designed to maintain a stable value by being linked to an asset, right, or a combination of both. This is different from e-money tokens and uses collateral assets to stabilize the value, including fiat money, commodities, or even other crypto-assets. In practice, ART is often understood as a stablecoin.

For example, imagine a hypothetical ART called EcoCoin, designed to maintain a stable value by being backed by a portfolio of assets: 50% euros, 30% gold, and 20% Bitcoin. By diversifying across multiple asset types, EcoCoin can better withstand market fluctuations that may affect individual assets.

To issue an ART like EcoCoin, the issuing entity must be a valid legal person, often operating as a credit institution, and must meet strict regulatory standards. This includes:

• Maintaining sufficient reserve to back the issued tokens.
• Ensuring the ART is managed in a transparent and stable manner.

The regulation also requires issuers to provide clear information about the assets backing the token and the methods used to maintain its stability.

Part IV of MiCA

Part IV of MiCA sets out the principles for the issuance of E-Money Tokens (EMT), a type of crypto-asset linked to fiat currencies like the euro or dollar. These tokens aim to maintain a stable value, similar to the digital version of traditional money.

To issue EMT, the entity must be licensed as a credit institution or an electronic money institution. For example, if a company called PayToken plans to issue an e-money token pegged to the euro, the company must be approved by the regulator before offering this EMT to the public. This process includes submitting a whitepaper detailing the features, issuance process, and conversion mechanisms.

In addition to the whitepaper, Part IV requires the issuing entity to notify the relevant authorities at least 40 business days before any public offering. The whitepaper must clarify how the EMT operates, including the issuance and redemption processes, to ensure transparency for investors.

Another key point of Part IV is the legal liability of the issuing entity. If PayToken provides misleading information to investors or fails to comply with the regulations, the company may be held responsible for any resulting losses.

Part IV also regulates trading platforms. The regulation prohibits the trading of e-money tokens with built-in anonymous features, unless all traders and transactions can be identified. This does not mean banning security tokens, but rather ensuring that anonymous transactions cannot occur on regulated exchanges, thereby supporting anti-money laundering efforts.

Here is a summary to distinguish the differences between ART and EMT:

Aspect	Asset-Referenced Token (ART)	E-Money Token (EMT)
Definition	Crypto-asset linked to a basket of assets	Crypto-asset representing fiat currency (fixed exchange rate)
Primary Use Case	Medium of exchange (not for payment)	Focused on payment purposes
Redemption	Market value or asset delivery	At par value with fiat currency
Issuer Requirements	Only MiCA-regulated entities; strict disclosure and reporting	Licensed electronic money institution or credit institution
Issuance Limits	Limits to prevent abuse as currency	No limits for EMT denominated in EU currency
Regulatory Scope	Only under MiCA	MiCA + E-Money Directive 2 (EMD2) / Payment Services Directive (PSD2)

Part V of MiCA

Part V of MiCA identifies the entities authorized to provide services related to crypto-assets in the EU and clarifies their scope of activities. The types of organizations that can provide these services include:

• Credit institutions
• Central securities depositories
• Investment firms
• Market operators
• Electronic money institutions
• UCITS management companies
• Alternative investment fund managers (AIFMs).

To operate legally in the EU, businesses must comply with various regulations and be licensed in the member states where they operate. In this context, a "legal person" refers to any entity recognized by law as having rights and responsibilities, such as the ability to enter into contracts or own assets.

Part V also simplifies the provision of cross-border services within the EU. For example, if CryptoTrade is licensed in France, they can provide services in other EU countries, such as Germany or Italy, by notifying the authorities in those countries.

Additionally, this part includes important requirements for service providers, obliging them to meet specific duties towards their clients, including:

• Ensuring robust security measures.
• Establishing a sound governance structure.
• Complying with operational standards.

These requirements aim to protect consumers and promote transparency in the crypto-asset market.

Part VI of MiCA

Part VI of MiCA focuses on preventing market abuse in the crypto-asset sector. The objective is to promote fair trading by preventing practices such as insider trading and market manipulation, based on rules from the traditional financial sector. Specifically, this part includes:

: Strictly prohibited to trade crypto assets based on undisclosed inside information. For example, if an employee of a crypto exchange knows in advance an announcement that could drive up the price of a token, they are not allowed to trade based on this inside information. : Leaking inside information before it is officially published is illegal, especially if the information could affect the price of crypto assets. Those who share this sensitive information may face legal liability. : Any actions that create false signals about the price or supply of crypto assets are prohibited. This includes practices like wash trading, where an individual buys and sells the same asset to create the impression of more trading activity than actually exists. Importantly, these regulations apply to both centralized exchanges (CEXs) and decentralized finance (DeFi) platforms, ensuring that market abuse is controlled across the entire crypto ecosystem.

Section VII of MiCA focuses on how regulatory authorities in the EU collaborate to manage the crypto asset market. This regulation establishes a system where national authorities in each EU member state coordinate with EU-level agencies to ensure effective supervision and enforcement. Key elements include: : Each EU member state must designate an authority responsible for enforcing MiCA regulations. These authorities ensure that crypto businesses in their country comply with the rules. : If a country detects an issue, such as market manipulation, they must share this information with EU regulatory bodies like the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA). This helps ensure a coordinated and consistent response across borders. : Regulators are granted clear powers to investigate and impose penalties. For example, if a crypto exchange operates without the proper license, the authority can suspend the service or fine the company. : National authorities must exchange information regularly, which is crucial for addressing global risks in the crypto space. This helps regulators coordinate better and quickly detect issues like fraud or manipulation. : To make cooperation more effective, Section VII introduces standardized processes for information sharing. This ensures transparent and efficient communication between regulatory authorities. An important feature of the MiCA regulation is the clear identification of asset types that are not within its scope. This helps delineate what MiCA applies to and what it does not, ensuring that only certain crypto assets fall under the MiCA legal framework. The main exclusions are: : If a crypto asset is considered a financial instrument under other EU laws, it will not be subject to MiCA. : Assets meeting the definition of deposits or structured deposits are excluded from MiCA. : MiCA does not apply to assets classified as investment funds. : Token representing securitized positions are exempted from MiCA. : Even if tokenized, life and non-life insurance contracts are not considered crypto assets under MiCA. : These financial products are also outside the scope of MiCA. : Unique and non-fungible NFTs (such as digital art tokens without utility or tradability) are excluded. : Certain public sector transactions are exempted from MiCA regulations. : Central bank-issued digital currencies are not subject to MiCA. : Assets that are not transferable, such as specific customer loyalty points, are also excluded. For example, if a company creates an NFT representing a unique piece of digital art, this token would not fall under MiCA, as long as it is not fractionalized or provides utility like a payment method. By 2025, the MiCA regulations will be fully implemented, but this is not the end - it is just the beginning. As MiCA lays a solid foundation, countries like the US, UK, Singapore, Canada, Japan, and the UAE may use it as a model to build clearer rules around crypto assets, market integrity, and consumer protection. The impact of MiCA has the potential to lead to harmonization across regions, improve transparency, and ensure investor safety globally.