Patrick

Bank AI

Million

<ul class="list-ic vertical"> 
 <li> 1 <a>E.U. presented MiCA as a comprehensive regulatory framework for digital assets.&nbsp;</a> </li> 
 <li> 2 <a>&nbsp;MiCA does not cover everything related to crypto.&nbsp;</a> </li> 
</ul> 
European Union developed MiCA, a comprehensive regulatory framework, but experts argue it’s incomplete and doesn’t cover everything crypto. From December 30, 2024, the E.U. will become the world’s first to have crypto regulation with its pioneer Market in Crypto Asset Regulation. Despite claiming to cover everything, it still misses a few key details.&nbsp; 
<h2 class="wp-block-heading" id="strong-mica-does-not-cover-everything-crypto-strong">MiCA Does Not Cover Everything Crypto</h2> 
A crypto expert, Patrick Hansen, tries to explain the gaps left by MiCA creators. He lists out several things that should be included in the framework. For instance, the utility tokens that can only be used within a specific network are not a part of the MiCA umbrella.&nbsp; 
In a tricky situation, if a crypto asset does not serve over 150 people in every member country of the European Union, it is not qualified to be a part of it. Even the offerings of less than 1 Million EUR within 12 months make a project fall out of the scope of MiCA. Moreover, the lending and borrowing of crypto assets involving e-money tokens does not require any regulatory approval.&nbsp; 
Crypto asset services that follow a fully decentralized system will not be a part of <a href="https://www.thecoinrepublic.com/2023/08/17/mica-is-it-a-guiding-light-for-crypto-regulations-worldwide/" rel="noopener noreferrer nofollow">MiCA</a>. At the same time, crypto assets without an identifiable issuer or the ones that do not have a white paper do not have any authorization requirement. In comparison, the partially decentralized entities fall under the jurisdiction of the regulatory framework.&nbsp; 
<h2 class="wp-block-heading" id="strong-what-else-did-mica-forget-to-include-strong">What else did MiCA forget to Include?</h2> 
Despite claiming to be a comprehensive and almost one-stop solution, MiCA does not apply to non-fungible tokens (NFTs). Including digital art and collectibles, the crypto-assets representing unique and non-fungible assets like real estate fall outside the jurisdiction limits of MiCA. However, some fractions of NFTs issued in large series or collections fall under the regulation.&nbsp; 
Once hyped, non-custodial wallets, hardware, and software providers circumvent the regulatory perimeter. They are providing a sigh of relief to the companies offering these services. Intragroup transactions, public entities, and international organizations like the Bank of International Settlement (BIS) and the International Monetary Fund (IMF) are excluded. Central Bank Digital Currencies (CBDCs) and other assets issued by public authorities will not be a part of MiCA.&nbsp; 
<h2 class="wp-block-heading" id="strong-registration-licensing-procedure-mica-2-0-strong">Registration/Licensing Procedure &amp; MiCA 2.0</h2> 
In a Webinar, Janet Ho, Chainalysis’ Head of Policy for Europe, explained the <a href="https://www.thecoinrepublic.com/2023/06/15/for-mica-crypto-firms-need-to-be-proactive-chainalysis/" rel="noopener noreferrer nofollow">registration/licensing procedure required for MiCA</a>. She requested the companies wishing to apply to be proactive, as after its implementation in December 2024, the acquisition procedure might take months.&nbsp; 
Any company that wishes to apply first must choose any European Union member country. After this, the company must file with the concerned authority at the location, which would notify within 25 working days about any missing document or information required. Then, the company has to wait 60 days to hear the final word about the application, if it is either accepted or rejected.&nbsp; 
It is still over a year for MiCA to be implemented, and it will take a few months to show the desired results. But the authorities are still talking about <a href="https://www.thecoinrepublic.com/2023/06/28/mica-2-0-talked-about-in-e-u-before-execution-of-first-one/" rel="noopener noreferrer nofollow">MiCA 2.0</a>. Industry experts believe it’s a right step in the right direction, as it would solve the flaws of MiCA quickly and effectively.&nbsp;&nbsp; 
MiCA is a pioneer regulatory framework, and no one claims it to be perfect. Hence, waiting for the first one to be effective in December 2024, accessing its flaws, and then preparing for the next version would be a waste of time.&nbsp;

MiCA is Imperfect; Here’s What is Keeping it from Perfection

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Thecoinrepublic.com

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