Markets in Crypto-Assets Regulation (MiCAR)

The Markets in Crypto-Assets Regulation (MiCAR) introduces a new regulatory framework for crypto-assets. MiCAR aims to protect consumers and investors and mitigate risks to financial stability.

Finalisation of MiCAR

  • MiCAR was published in the Official Journal of the European Union on 9 June 2023.
  • MiCAR became applicable for issuers of Asset-Reference Tokens and issuers of E-Money Tokens on 30 June 2024.
  • MiCAR will become applicable for Crypto-Asset Service Providers (CASPs) and issuers of utility tokens on 30 December 2024.

Issuers of Asset Reference Tokens (ARTs) and E-Money Tokens (EMTs)

MiCAR brings issuers of certain types of crypto-assets into the regulatory framework. Specifically, MiCAR establishes new rules for issuers of crypto-assets known as "stablecoins" including ARTs, EMTs, along with new rules for utility tokens. 

As defined by MiCAR:

  • ARTs reference multiple currencies, commodities or other crypto-assets;
  • EMTs reference a single official currency; and
  • Utility tokens provide access to a good or service supplied by the issuer of that token.

From 30 June 2024, issuers of ARTs and EMTs have the following regulatory obligations: 

  • A requirement to be authorised by the Central Bank and to publish a white paper containing information on the relevant ART/EMT for consumers;
  • Conduct and governance requirements around marketing, disclosure of information and dealing with conflicts of interest; and
  • Prudential requirements to ensure sufficient liquidity and the ability to meet redemption requests.

MiCAR recognises that some ARTs or EMTs may be significant due to their size and other factors and as a result may present an increased risk. Accordingly, the European Banking Authority (EBA) will have supervisory responsibilities for issuers of significant ARTs and EMTs.

Issuers of ARTs and EMTs - Engagement with the Central Bank

A legal person or other undertaking that intends to offer to the public or seek the admission to trading of ARTs should contact the authorisation team ([email protected]) at their earliest opportunity.

A credit institution that intends to offer an ART to the public or seek its admission to trading should engage directly with its supervision team at its earliest opportunity.

A credit institution or Electronic Money Institution (EMI) that intends to offer an EMT to the public or seek its admission to trading should contact their supervision team for further guidance.

EBA Statement  on the application of MiCAR to ARTs and EMTs (July 2024):

In this statement:

  • The EBA outlines it expects that any person which intends to commence ART or EMT activities to comply fully with MiCAR form 30 June 2024;
  • The EBA notes that consumers considering buying an EMT or an ART, should check whether the issue, offer, or admission to trading is carried out in accordance with MiCAR;
  • This information should be signalled clearly in the white paper for the crypto-asset and on the issuer’s/offeror’s/trading platform’s website, and also present in the register of ESMA (when available).  Authorisation information may also be verified on the website of the relevant competent authority;
  • It is important for consumers to be aware that if an issue, offer, or admission to trading of an ART or EMT is not carried out in accordance with MiCAR, the safeguards set out in MiCAR do not apply, and consumers should be extremely cautious in acquiring such crypto-assets.
  • The EBA also notes that from the 30 June 2024, stakeholders carrying out ART/EMT activities should assess their compliance with MiCAR, and refrain from carrying out services which constitute offering to the public, seeking admission to trading, or placingnon-compliant ARTs/EMTs.

The Central Bank has not approved or been notified of any crypto-asset white paper for an ART or EMT under MiCAR.  

EBA Statement - supervisory priorities for issuers of ARTs and EMTs 2024 /2025 (July 2024):

On 5 July the EBA published a statement for the attention of persons issuing to the public, offering to the public, or seeking admission to trading of asset-referenced tokens (ARTs) and e-money tokens (EMTs) and for consumers. The EBA also sets out key topics for supervisory attention across the European Union for issuers of ARTs/EMTs in 2024/2025.

Crypto-Asset Service Providers (CASPs)

CASPs shall require authorisation in order to operate within the EU. The types of crypto-asset services and activities covered by MiCAR include:

  • Providing custody and administration of crypto-assets on behalf of clients
  • Operation of a trading platform for crypto-assets
  • Exchange of crypto-assets for funds
  • Exchange of crypto-assets for other crypto-assets
  • Execution of orders for crypto-assets on behalf of clients
  • Placing of crypto-assets
  • Reception and transmission of orders for crypto-assets on behalf of clients
  • Providing advice on crypto-assets
  • Providing portfolio management on crypto-assets
  • Providing transfer services for crypto-assets on behalf of clients
  • At a high level, CASPs authorised under MiCAR will be subject to AML, prudential and conduct requirements. 

Market abuse

MiCAR also introduces new rules that prohibit market abuse related to any type of crypto-asset transaction or service, including unlawful disclosure of inside information, insider trading and actions that are likely to lead to disruption or manipulation of crypto-assets.

Transitional Period for CASPs

MiCAR provides for a transitional period of up to 18 months for CASPs that provided their services in accordance with applicable national law prior to 30 December 2024. Article 143(3) outlines that Member States can decide not to exercise the discretion or to reduce its duration where they consider the national regulatory framework is less strict than MiCAR.

Following its public consultation on Member State discretions in MiCAR, the Department of Finance outlined in its feedback statement that the transitional period for Virtual Asset Service Providers (VASPs) operating in Ireland in accordance with applicable law prior to 30 December 2024, shall be a maximum period of 12 months.

Simplified procedure for applications for CASP authorisation

MiCAR (Article 143(6)) provides for a derogation from the authorisation requirements contained in Articles 62 and 63, which allows Member States to implement a “simplified procedure” for service providers authorised and operating under national law to provide crypto-asset services prior to 30 December 2024.

Following the above public consultation and as outlined in its feedback statement, the Department of Finance has decided not to exercise the discretion provided for in Article 143(6).

This position reflects the advice of European Securities and Markets Authority (ESMA), and recognises that Ireland’s existing VASP regime under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 as amended, is not comparable to the MiCAR CASP requirements.

See also: Impact of Markets in Crypto Assets Regulation (MiCAR) on Virtual Asset Services Providers

MiCAR Level 2 and Level 3 Texts

The EBA and ESMA  have developed the majority of the level 2 and 3 texts which,  will provide greater granularity on the provisions in MiCAR.

The texts are not yet finalised. However in its July 2024 statement the EBA notes that the regulatory and implementing technical standards and guidelines applicable to the issuers and offerors of ARTs and EMTs are available on the EBA’s website. The EBA urges issuers and offerors to have regard to these documents and adjust as if those measures were fully applicable, in the case of technical standards pending their adoption by the European Commission and publication in the Official Journal of the European Union. This includes measures relating to white papers, governance, complaints handling, own funds, reserve assets, recovery and redemption plans.

Firms should regularly monitor EBA, ESMA and European Commission’s websites for updates on these texts. 

See further information available on ESMA’s three MiCAR consultation packages and the EBA’s approach to its MiCAR policy mandate

Request to complete ESMA Survey on MiCAR Article 60 – Provision of crypto-asset services by certain financial entities

In view of the implementation of MiCAR in 2024, ESMA is currently undertaking a fact-finding investigation at the European Union level in order to build a picture around financial entities that are planning to provide crypto-asset services throughout the European Union.

The purpose of the ESMA questionnaire is to obtain information regarding financial entities interested in conducting crypto-asset services.

This questionnaire has been developed in conjunction with NCAs. The results will be analysed by ESMA, with its findings reported to NCAs.

The Central Bank encourages regulated financial service providers based in Ireland, and permitted to avail of the MiCAR notification procedure under Article 60 MiCAR, to assist ESMA by completing the questionnaire.

Firms are invited to complete the online questionnaire by Friday 26 July 2024

Supervisory convergence in the MiCAR transitionary phase 

ESMA published a statement in which it notes that full MiCAR rights and protections will not apply to the provision of crypto-asset services until December 2024. ESMA also encourages preparations for a smooth transition to MiCAR across all EU Member States.

Additionally, in a letter addressed to the Economic and Financial Affairs Council (ECOFIN), ESMA Chair, Verena Ross, outlines that coordinated action from EU Member States will be paramount to ensure the smooth, convergent, and effective application of MiCAR.

Firstly, ESMA note that NCAs will need to establish as early as they can, supervisory procedures related to the authorisation regime set out in MiCAR. Secondly, ESMA expressed concern that extensive use of the transitional period for entities already providing crypto-asset services in the European Union would weaken the effectiveness of the MiCAR rulebook and so ESMA invited Member States to consider reducing the transitional period for entities that are already providing crypto-asset services from eighteen to twelve months.

Central Bank’s preparation

The Central Bank will be designated as the NCA for the authorisation and supervision of entities that will be subject to MiCAR.

The Central Bank encourages firms that may provide services or products under MiCAR to engage with the Central Bank.

The Central Bank has commenced its preparation for the implementation of MiCAR and has established a cross-sectoral team to integrate MiCAR into the Central Bank’s supervisory and authorisation processes and methodologies. The Central Bank will issue further communications regarding the authorisation and notification processes in due course. Additionally, the Central Bank will continue to monitor developments related to crypto-assets in order to assess any risks to consumer protection and financial stability.

Consumer information related to crypto assets is available on our consumer hub.