On March 14, 2022, the European Parliament adopted the MiCA or Markets in Crypto Assets regulation proposal. This regulation aims to harmonize the various national laws on cryptoassets and to propose a framework to protect the consumer and the investor.

Current French legislation

After observing the global craze for cryptos but also its possible failures, France was able to propose a legislative framework with firstly law n ° 2019-486 of May 22, 2019 or Pact law and secondly the Ordinance n° 2020-1544 of December 9, 2020 strengthening the system for combating money laundering and the financing of terrorism applicable to digital assets.

This French framework requires service providers offering interchange services between digital assets and legal tender currencies to register with the AMF as Digital Assets Service Providers (DASP) in order to target the French market. Regarding LCB-FT standards, the regulation prohibit the service providers from holding anonymous accounts, with the aim of reducing the anonymity of cryptoassets transactions.

Some Member States of the European Union have chosen their legislative framework, however this regulation differs from one European country to another, which may encourage some companies to favor the country with the most lenient legislation or regulatory authority.

A proposal aiming for the protection of the investors

The main objective of this regulation is to eliminate this discrepancy between legislations of the different Member States. MiCA will create a system specific to cryptoassets service providers, similar to the one we know in France, and will consist in having an authorization from national market authorities. The European system will automatically replace the French one but will also give access to a European passport making it possible to offer its services directly in all the countries of the Union. This status will have the consequences of strict requirements, in particular the necessity of having a good reputation for the leaders or even having a good knowledge of the customer.

The strict framework of stablecoins

Stablecoins are tokens that are indexed to another asset, this reduces the risk of volatility. In fact, dollar-pegged tokens quickly became overrepresented among stablecoins, especially with Tether offering USDT. The main problem with stablecoins is the guarantee of the asset, the company offering its token must be able to ensure the payment of the stablecoin and thus have the funds for this purpose.

The MICA regulation aims to regulate the issuance of these tokens by requiring players to obtain prior approva land send a white paper to the competent authority. This white paper will provide more transparency to investors and an accurate description of the project.

A settlement subject to discussion

Article 61 of the MiCA regulation has challenged many protagonists of cryptos with an amendment consisting in prohibiting cryptocurrencies based on "proof of work", this mechanism being criticized in particular because of the energy expenditure that it implies. This amendment would have indirectly led to the banning of Bitcoin or even Ethereum, these issuers using this mechanism as a validation system. However, the article 61 was defeated by 32 votes against and 24 for.

The MiCA regulation must then be confronted with the European trialogue between the Parliament, the Commission and the Council for entry into force within the following eighteen months.

European and French legislative developments can have consequences on your assets, Wealth A7 is always kept informed of legal news in order to give you advice adapted to your needs.

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