MiCA regulation adopted by the European Parliament, NFTs and DeFi exempted
Reports indicate that the European Parliament recently adopted the MiCA regulatory framework. However, NFTs and DeFi are free from the new regulations.
MiCA adopted by European Parliament
The European Commission and the European Union member states have been working on MiCA, a new set of regulations for crypto assets. Recently, reports indicate that the European parliament officially accepted the MiCA.
In a press statement, the regulatory body charged with financial markets in France Financial Markets Authority (FMA) noted that this regulation will take effect in January 2025.
The European Parliament adopted MiCA on April 20. The AMF noted that it would continue preparing for ways to transition to the newly adopted regulation. MiCA targets to regulate virtual assets not accommodated by the current European rules on such financial instruments.
The FMA statement pointed out that this new regulation would completely replace every regulatory framework from each member country. French authorities indicated that even their French framework launched in May 2019 would be replaced by the MiCA.
Based on the press statement from French’s FMA, once completely implemented, all crypto assets service providers will have to get direct approval under MiCA regulation. An approved service provider will now get passports to operate in the entire EU.
NFTs and DeFi not under MiCA
The statement noted that two blockchain technologies, i.e., NFT and DeFi, will be exempted from the regulation. Unless NFTs meet specific criteria described in the MiCA text, they will not be under MiCA. However, the European Commission remains mandated to look into NFTs and create a particular regime for the assets.
DeFi, like NFT, is also excluded from the scope of the MiCA text. In this case, also, the commission will continue assessing the situation to develop a regulatory framework for the assets.
The relevant EU authorities will have the simple charge of continually assessing NFT and DeFi markets to see if there is any necessity for more regulations.
The European Commission said in a bold statement that MiCA “does not apply to crypto-assets that are unique and not fungible with other crypto-assets.”
Leaving out NFTs in the MiCA regulation creates a regulatory dilemma for these assets.