EU's MiCA Crypto Law Text Ready Within 6 Weeks, Lead Lawmaker Says

A political deal struck in June left many still scratching their heads about whether licensing rules will apply to non-fungible tokens

AccessTimeIconSep 1, 2022 at 6:53 p.m. UTC
Updated May 11, 2023 at 5:01 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The text for the European Union’s landmark Markets in Crypto Assets (MiCA) Regulation could be ready within six weeks, leading lawmaker Stefan Berger said Thursday.

Lawmakers and governments had reached agreement on the main outline of the legislation, which requires crypto asset providers to register with regulators in to offer services across the bloc, on June 30. But in the absence of a final legal text there is still considerable uncertainty on the law's finer points, such as whether the rules will apply to non-fungible tokens (NFT), which offer proof of ownership of assets such as artworks using distributed ledger technology.

The law is set to create parameters for how each of the European Union's member nations regulates crypto. It's expected to create a common licensing regime, making it easier for companies operating in one member nation to launch in the others, as well as define rules for issues such as stablecoin issuance.

Berger, a German politician who led negotiations for the European Parliament on MiCA, told an online panel hosted by German lobby group Bundesblock that technical work is still underway on the law, which will only start to apply 18 months after being gazetted in the EU’s official journal.

“I’d say in four to six weeks” the text will be ready, Berger said. “We’re all working on it, eight hours a day, it’s in the process ... but I think in six weeks we should have something ready to present.”

Under the final deal, any crypto service provider with over 15 million active users would be subject to supervision at the European level, Berger said – suggesting all but the largest players will remain under the watch of national regulators like Germany’s Bafin.

But Berger also cast doubt on how exactly NFTs will be treated under the law. The industry is worried premature regulation could choke a nascent and developing sector if the law requires specialized NFT platforms like OpenSea to seek authorization.

“We decided to leave NFTs out” of the law, unless they resemble conventional financial assets, Berger said.

His remarks contrast with those made by European Commission officials – who have suggested the final carveout is narrow, meaning that in practice most NFTs will fall under the law.

In the meantime, crypto market players are waiting to know the exact answer.

“The devil is in the details” for the MiCA law, Patrick Hansen, a crypto venture advisor at Presight Capital, told the event.

If NFTs that are part of a collection or series are to be regulated, Hansen said, “when you look at the current NFT market, this is the vast majority, 95% or more.”

Quotations from Berger and Hansen have been translated from German.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

Helene Braun

Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.