MiCA 2: Lessons from the First Year of Enforcement and What Comes Next | EBC12

Oh, bright light. I like it. Hello everyone. Good afternoon. My name is Tommaso Astazi.

I am the Policy Director at Blockchain for Europe, a Brussels-based trade association that represents the blockchain industry and Web3 to European policymakers. So MiCA, of course, is a topic that I've been talking about for the last five years, and MiCA 2 will be a topic that I'll be talking about for the next five. Thank you all again for the invitation. It's great to be back at the European Blockchain Convention, and it's my first time here as a local, having moved to Barcelona right after the last conference. Wonderful city.

It's great to be back at the European Blockchain Convention, and it's incredibly rewarding to be with such a stellar lineup of panelists. We will talk about MiCA, what worked in MiCA in this first year of implementation. We will do this with people on stage who have a very specific and direct perspective on this issue. But we'll also talk a little bit about what's happening and what's expected next. We are at a very important moment.

If you don't know—it's a good thing you don't know, because if you do, it means you're losing a lot of sleep, but MiCA 2 is coming up, and consultations are underway now, with a deadline of the end of September. Many of you in this room know what I'm talking about, and are probably just as sleep- deprived about it as I am. But without further ado, let's allow our panelists to introduce themselves. A brief introduction about who you are and what you do, and then let's start our conversation. Victor?

Yes, thank you. My name is Victor Vella. I work at Baader Bank in the legal department. Baader Bank is a German bank in Munich, and we offer crypto trading to our institutional and retail clients. Perfectly.

Thank you. Stefan. Yes, hello everyone. My name is Stefan, and I work at BaFin—the German Federal Financial Supervisory Authority—where I focus on financial market infrastructure and the potential impact of DLT. Ideally.

Christian. I'm Christian Moore from the European Banking Authority. I have been working there for over 16 years. Initially, I focused on banking and capital markets regulation, but since 2023, I have been fully focused on MiCAR, specifically on regulatory technical standards for stablecoins. I also handle all the work of the Basel Committee and banking regulation of crypto assets.

Perfectly. And last but not least, our international guest on stage. Greetings to everyone. I'm Kaseki Murai from the Japan Crypto Asset Business Association. Similar to what Blockchain for Europe does, we are a private industry association and currently have over 150 members both domestically and internationally.

Yes, I'm happy to contribute to this discussion. Thank you very much. Perfectly. Thank you all. So, as you can see, we have a very diverse panel, right?

We have a person who works directly with a MiCA-licensed organization in Europe, in Germany. We have his own regulator, so it's great that we put them next to each other so they can argue. But in reality, it is a regulatory body that controls the German market. We have the European Banking Authority, which obviously has a hugely important mandate within MiCA, so we'll talk a little bit with Christian about the rules around stablecoins and so on. But we also have a global perspective, a person from Japan who has been watching what the European Union has been doing for the last few years.

They have also taken some very interesting approaches to regulation, and we can try to compare what they do differently than what we do here in Europe. So, let's get to the point and maybe start with what we have now. Before we move on to the future, we have MiCA. We've had MiCA, essentially, since June a few years ago. Now the rules are actually in effect.

There was a whole transition period for the current players. But there are so many questions, so many challenges. Maybe you want to start, Victor? What do you think were the biggest challenges you faced, for example, when getting your license? Yes, preparation was key, I think.

We spent a year and a half preparing the application for execution of orders, but the regulator was very friendly, the discussions went smoothly, and I believe that, as with other licenses, the dialogue with the regulator is very important. If you talk to them , they are friendly. Well, I remind you, you can say bad things even if he is sitting next to you, but that is not the reason. We really hear this from a lot of people: there are regulators who are actually very open, interested, and ready to engage and have a dialogue, as Victor points out. This is fundamental, right?

Yes, but let's put it this way: we are banks, and it was easier for us than for other institutions because we specialized in securities trading . We have all the policies, the best execution policy , the complaint handling policy, etc., the terms of use of securities, and we can actually enforce them. We studied MiCA, how it differs from securities law , and as I said, it was a big project, but in the end, MiCA works well overall. Perfectly.

So, Stefan, apart from the positive feedback about your activities and the dialogue with market operators, what do you think were the main challenges? Because we know there were a lot of them, but perhaps there are some that you would like to draw the attention of our audience to. Yes, good question. And indeed, it's worth perhaps starting with some positive feedback as well. So, as you said, a transition period was foreseen.

We already had a national regime for crypto-asset service providers before MiCA came into force, so it is very pleasing to see that we have made a smooth transition for these firms to the European structure. In this regard, the existence of a harmonized European framework that truly allows cross-border provision of services for all these crypto-asset providers is also welcome. And perhaps it is worth highlighting two topics that have been actively discussed in the past. First, more is happening in the background between national competent authorities and European authorities to define a standardized framework, in particular regarding level two requirements, in order not only to define them but also to apply them in a harmonized interpretation. And the second, which is still ongoing: many of these crypto-assets used by institutions or firms still do not have a specific legal classification from a private law perspective, so there is still a need for classification and a harmonized approach to specific crypto-assets in light of MiCA.

Indeed, you know, two years have passed, five years of negotiations, but the questions still remain. There are still open aspects that we need to address, and of course we hope that some of them will be addressed in MiCA II and other pieces of legislation that we will touch upon. But now let's move on to Christian and the European Banking Authority and the role that you obviously role that you obviously got, having a fairly strong mandate from MiCA, which means that the EBA does have extremely important supervisory responsibilities, and also that you were part of the policy development process during the negotiations and finalisation of MiCA. So, Christian, can you give us a quick overview of what exactly this has meant over the last year for the EBA in terms of responsibilities, and also your perspective on the regulation of stablecoins, which you know is a major focus of your mandate. Yes.

Well, of course, it meant a lot of work and a lot of internal reorganization because we were given supervisory powers for the first time. In the past, we were more of a regulator and advisor, but now that stablecoins are becoming significant, we are effectively becoming a watchdog. So to do this, we had to make a significant number of internal changes. We also had to make sure that we were getting the right data from institutions, and at the same time we had to develop technical standards on prudential rules, capital, liquidity, authorization, licensing, etc. So we've had to do all of this over the last few years.

In the meantime, we were also working on anti- money laundering rules and the " travel rule", for example travel rule", for example , but at that time another European agency, the Anti- Money Laundering Agency, was created, so we transferred all our powers on this issue to that agency. Overall, it was a huge amount of work, and I have to say I'm very happy that, in my opinion, it's very successful. We currently have over 25 EMT issuers. We have more than 330, it seems, crypto asset service providers. So overall the picture is positive, and don't forget that we started this whole process when, for example, the US was still suing crypto players, you know, this was before 2025.

So, yes, everything is very positive. Of course, we had a few obstacles along the way. We released a report last year, for example, on crypto asset service providers, as well as unregulated entities that were required to obtain a license. They started applying to six or seven different jurisdictions to get a license. So we call it " call it " jurisdiction shopping."

Please don't do this. This is what we don't like. Then we had licensing issues between payment service providers and MiCA, the rules are not the same. We issued a no-action letter to not implement immediate enforcement, but to give the industry more time to adapt. We had a question about unregulated stablecoins and whether they are allowed to be sold and held on exchanges, we clarified—no.

Therefore, unregulated stablecoins, unregulated EMTs cannot be sold and cannot be stored on exchanges. And, of course, one of the pressing issues one of the pressing issues that we still haven't been able to resolve concerns issuers in different jurisdictions. Are they allowed? Are they not allowed? By what rules?

Apparently, our partner financial stability body has recommended not to ban them, or if not, to create stricter rules to ensure macroprudential stability. So that's something we're still working on. Another problem, obviously, is asset-pegged tokens . Interestingly, one of the reasons for the creation of MiCA in 2019 was Facebook's Libra initiative to create multi-currency baskets to issue a type of stablecoin, which is very similar to an asset-pegged token. At this point, we have zero asset-pegged tokens in euros.

So we have to think about So we have to think about whether the rules are too strict, or whether this product is simply not needed? Will it be used for gold? Will it be used for multi-jurisdictional multi-currency stablecoins? These are questions that are still open and will now be put up for discussion. That's right.

So, as you can see, there are a lot of questions. The part about asset-backed tokens is asset-backed tokens is , in my opinion, one of the most interesting in this story, isn't it? A whole section. This is probably the longest section in MiCA longest section in MiCA , despite the fact that no such token exists. So maybe that will change in MiCA 2.

Who knows? We'll see. But I think Christian also pointed out some other very important discussions that are really keeping us all on edge in Brussels, especially around multi-jurisdictional issuance of stablecoins and how they can circulate within the European Union, and the additional safeguards that might be put in place. If you follow this topic follow this topic , you know what we're talking about, but concerns have been expressed by the European Central Bank and the European Systemic Risk Board. So the European Parliament now, I was in the parliament last week, is still discussing this topic, it's a very sensitive issue.

Let's see if this will be resolved in MiCA 2? Will certain amendments to MiCA already be made through another package currently being discussed in Brussels—the package on market integration and supervision? A lot is happening, right? So, as you can see, this is a hot topic. We could talk about this for hours, but now we move on, and we move to the other side of the stage, and also to the other side of the world, with our representative from the Japan Crypto Asset Business Association.

We would like to hear your thoughts, because yes, we are focusing on MiCA, but MiCA was always supposed to be a kind of example, right? The European Union indeed had the ambition to become the first jurisdiction in the world to develop and implement a comprehensive regulatory framework for cryptoassets. With the idea that everyone else— the idea that everyone else— because we in the EU have, I don't know, a certain ego—will look at us, trying to either follow our example or do something different. Is this true? Have you actually been following the European Union, and what's happening in Japan, which might be interesting, especially when compared to European norms.

Yes, thank you very much for the introduction. It is also interesting for me or for us to see what is happening in Europe and what discussions are taking place around MiCA before and after its implementation. But maybe let me clarify a big difference between Europe and Japan. Japan, of course, is a truly unique market, and you can imagine that if you are a Japanese SME, you don't need to use stablecoins pegged to the US dollar at all. Unless you have an international business and your daily economic activities can be carried out exclusively in Japanese yen.

But in Europe, of course, everyday transactions can be cross-border be cross-border , right? So the business , right? So the business context or logic is a little different, and that's what's happening in Japan right now. Crypto-related businesses in Japan were regulated by the Payment Services Act, just as Bitcoin was once regulated. So crypto assets were a kind of means of payment.

But this year, the Japanese parliament passed a bill to transition from the Payment Services Act to the Financial Instruments and Exchange Act, which is the same law that regulates traditional securities. This means that businesses related to crypto assets, or crypto assets, will be considered financial products, not a means of payment. Yes. This is extremely interesting because I think this is a really relevant discussion and for what's happening in Europe, right? So, Japan has decided to introduce a single regulatory framework for working with financial instruments, regardless of whether they are tokenized or traditional, correct?

For example, this is a question we actually ask ourselves in the EU. So again, if you had the pleasure of reading the 90 questions of the MiCA consultation, the very first one actually asks: "What do you think the future framework for crypto assets should be?" Should we have a MiCA framework regulating cryptoassets and a MiFID framework regulating financial instruments, as we have today? Or should we move towards a future where we have one tool, one framework tool, one framework , that covers digital assets more broadly, regardless of whether they are financial instruments or not? "That's one of the first questions.

That might be a question for discussion later. Maybe we have some views on that here too, because I think it's a fundamental question. And then maybe let's be brief, because I still want to hear from you on stablecoins, right? Because that's also another element of the comparison between the two bases that I think is interesting, right? As we discussed in the preparation, as Christian mentioned, there's a big discussion around the issuance of stablecoins.

the issuance of stablecoins. So global stablecoins are coming into our jurisdiction. How does Japan approach that? Yes, thank you for the question. So, in terms of regulating stablecoins, stablecoins themselves will continue to be regulated under the Payment Services Act.

So they won't go under the FIA. But at the same time, the Japanese regulator has taken an interesting approach. We haven't created any new, significant regulation or law specifically for stablecoins, but there are only three types of licenses that allow stablecoins to be issued . These are banks . These are banks , trust companies, and money transfer operators.

So these three licenses—these are existing licenses and the same framework, but they have been expanded to also allow for the issuance of stablecoins. And we also accept foreign-issued stablecoins, such as stablecoins pegged to the U.S. dollar, but of course we still have some strict requirements for those foreign issuers to issue stablecoins in Japan that are pegged to the dollar or another fiat currency. Yes.

Okay. So, really, at least you know, there are safeguards, there are requirements, but Japan has taken the approach where they are inviting global stablecoins into their jurisdiction. And that's also kind of a discussion that we're having in Europe, right? Should we allow these global stablecoins to be freely traded in the European Union, or should we allow these global stablecoins to be freely traded in the European Union, or should we allow these safeguards that are already in place? in MiCA, enough to protect against systemic risks?

Well, again, we could have another panel discussion on this, but really, in a sense, we have MiCA 2. So, we talked a little bit about MiCA 1, the problems that we have and the challenges of implementation. Let's move on to the future. Again , the consultations are ongoing. I assume that many of you will respond to this consultation in different capacities, but what do we expect?

What would you like to see in the new MiCA structure that would perhaps solve some of the current problems? Victor, let's start with you. Yes, thank you. Yes, you mentioned the creation of a single financial structure financial structure . I would disagree, because we had a common banking law.

There was a custodian. Then MiCA came along and we merged everything into one. That could make our lives very difficult. I would say that we should create MiCA 2, but separate from financial and securities law because of such competitors. They only offer crypto services and no securities.

That makes it difficult for them. And with MiCA 2, maybe it would be easier to also get your services certified in other countries. Then, because now you have to adapt all your terms and conditions to civil law. In 2025, 75% of crypto-asset service providers had certification, but they failed to do it . They said that they actually do cross-border activities and that could be easier could be easier .

And another example: MiCA lacks " tied agents". That is, the liability system that we have in MiFID MiFIR. So that's missing So that's missing . So I don't know why... .

So I don't know why... There are some points that can be improved, but it's good that they extended the consultation on MiCA 2 until September. So you are invited to improve MiCA. Indeed. Yes, that's a valid point, because indeed the previous deadline of August 30 was not very pleasant, we were all changing our summer plans, and finally got an extension.

So thank you to the European Commission for that, really. Thank you, Victor. Now let's listen to the regulators, shall we? And I'll try to put Stefan in a bit of an awkward position, because we would of course like to hear what areas of MiCA you think we should improve? But then again , there's another discussion related to MiCA, not exactly part of the consultation itself, or only part of it, but it's about centralised supervision, right?

So for those who haven't been following the topic: there's an ongoing discussion about whether we should change the supervisory architecture in the European Union, which currently relies on national competent authorities, like BaFin, which is the lead supervisor for all crypto-asset service providers, or do we need a new structure where the European Securities and Markets Authority, ESMA, takes over the supervisory functions for all or significant service providers? There is a lot of discussion here. So, from a national competent authority perspective competent authority perspective , what other areas in MiCA need attention and maybe you could share your views on the discussion on centralization if possible. Yes, thank you Thomas. Indeed, I will start with the regulatory framework and also perhaps framework and also perhaps some suggestions for further consideration.

What we are seeing as a result of the interaction and convergence of crypto-asset service providers and traditional financial institutions in the capital market is the interaction with EMTs, that is, electronic money tokens. These are also part of the MiCA package that should be implemented for use in the infrastructure of traditional financial markets. In this regard, we see not only a specific need to introduce alternative settlement assets for the monetary part of transactions, but also that there is now a discussion about expanding the services that are provided in EMTs, for example, the provision of credits or loans, because this really reflects and provides further efficiency gains in capital markets, in particular for firms providing services in both types of digital assets, i.e. crypto-assets and DLT- based financial instruments .

From a supervisory perspective, in terms of risk management capacity, we see that MiCA and other European frameworks only provide a regulatory framework for the provision of financial services. Therefore, in most most Member States of the European Union, there is still no private law framework for specific crypto-assets, and this issue is also part of the consultation to see whether there is a need or benefits to introduce such a framework at European level. This could be particularly interesting because in traditional finance and in Member States' private or securities law, we already see a strong fragmentation, and here we have the opportunity to avoid this fragmentation at the service level with crypto-assets. And especially with crypto-assets. Perhaps we will move on to the issue of centralisation.

I am not in a position to provide an official position of BaFin. This is part of the negotiations on the overall MiCA package, but I can share some thoughts from the ongoing cooperation with ESMA, for example in the area of infrastructure supervision financial market. There we have the sharing of supervisory colleges, that is, we have distributed responsibilities. In this respect, in my experience, even centralised supervisors would benefit from expertise on the specific characteristics of the market. This brings us back to the level of individual Member States, but at the same time, regulatory frameworks are usually open to interpretation.

They are often based on principles, and if we see this in the application of, for example, the MIR, then with a centralised supervisor, it can be assumed that the application of specific provisions and their understanding also become centralised. This creates a single view on certain topics, and in this context this can create risks for crypto-asset service providers, as there is less flexibility in the application of individual provisions. But what is really important, particularly in light of the consultations, is that I would like to address these issues to the market participants themselves; they themselves have to determine what they consider to be beneficial for themselves and their clients. Since it is worth considering that all these firms are currently going through the authorisation process, and the transfer of responsibility to a centralised body could lead to additional burdens, regardless of the results in the future. But, just look at what has already happened since MiCA came into force.

Yes, thank you very much, and indeed, I think you have given excellent advice to market participants, because this consultation is mainly aimed at them, to get feedback on what works well and what doesn't. Indeed, and I think Stefan has also raised important points in this discussion: it is not just about where the supervisory competences are, but whether there is a mechanism for using the expertise developed at national level so that it remains useful for the supervisory system, otherwise we will lose it completely . So I think it is very important, and I personally believe that we are moving towards a system where national competent authorities remain involved in the supervision of market actors . But of course, there needs to be more coherence and convergence of approaches so that we can really address, for example, the problems of forum the problems of forum shopping and jurisdictions that are perhaps more lenient with European regulation that should be applied in a harmonised way across the EU. Now back to Christian.

Christian, also from your point of view, I am again putting you in an awkward position because you are another authority that is not currently being considered for centralised supervision in this sense supervision in this sense . You already have your centralised supervision functions for significant issuers. So in a sense you are already in the game. But what is your view? And perhaps your view?

And perhaps from this point of view, what from this point of view, what actually works well within this structure? Yes, I can go through different points because we will also respond to the Commission's consultation Commission's consultation , in fact we will publish our response sometime next week. So I can already tell you that as far as financial instruments are concerned compared to crypto-assets, we want to leave things as they are. We think that it works well. Of course we need to improve and clarify the 'grey areas clarify the 'grey areas ', but at least we do not think that that there needs to be a revolution.

On multi-jurisdictional issuers, ultimately, we believe that we can include enough safeguards in the legislation to make it work. I think ultimately, it is important that European players and banks have access to stablecoins in US dollars and other foreign currencies. Whether it is through a third country equivalence regime or through additional safeguards within the current rules. But one way or another, we have to ensure that European players have access to stablecoins in US dollars and other foreign currencies. That is for sure.

On NFTs, I don't have any particular opinion. I think it will be very interesting to hear the market's opinion. Is it necessary? How can it be changed? Or can it be abandoned?

On centralized supervision, it is clear that from an EU perspective, the more centralization more centralization , the better and the easier our work on supervisory convergence is. As I said, there have been many cases around obtaining or not obtaining licenses not obtaining licenses . Completely different assessment methods between jurisdictions. Last year there was even a statement from one authority threatening to block other custodians from entering their market. Obviously, that is completely against the single market and the single rules.

So single rules. So , in my opinion, the more centralised supervision, the better, as long as it is done in a way that does not disrupt the market. Great. Thank you. Finally, Keisuke, what do you think?

What do you expect? So what would you like to see from the European Union, or what would be useful to achieve from a global perspective? Oh, that is a difficult question. Sorry. Now we are getting to the difficult questions.

Get ready, guys. We have a lot of time. In fact, our industry is always cross-border or borderless. So, while the mission of our association is of course focused on promoting a healthy business business environment for companies working with digital assets, at the same time we have to ensure that our business has a fair market and interoperability and so on. For example, the travel transfer rule rule), yes, we have the same discussions, the same problems, the same questions.

But I think, or we think, that we have something to learn from other jurisdictions and from such examples. So yes, the business yes, the business environment is different and the market is also different, but at the same time we have to bring such observations from other jurisdictions to our domestic market and communicate them to our stakeholders, such as regulators and policymakers. Great. Thank you. Then the last question to everyone, and we will answer quickly because we are running out of time, but if we meet again in two or three years in Barcelona.

You all are now welcome back to Barcelona. Finally I can say this. What is the factor that will allow us to say that MiCA 2 really works? And we have solved the problems that were with MiCA 1. What is the one element where you say, “Well, if this is happening, then we are all good”?

For me, it is that a crypto-asset service provider is actually providing its services in Europe. So it is easier for everyone to provide services in the EU to provide services in the EU . Okay. So, the proper certification of these crypto-asset services without any obstacles. Thank you.

Stefan. From my point of view, it would be useful to be able to apply both structures to the same entity in a harmonized way. So, it would really be good to avoid different wordings of the provisions and requirements in order to allow and support the convergence of both worlds, secured by separate legal entities. That would be great, but then the lawyers in this room would be out of a job. So I don't know if they'll like it if they'll like it , but let's hear from Christian hear from Christian .

I'll try to be a little more ambitious. I hope that in three or four years we'll be talking about DeFi the way we're stablecoins now, and hopefully also talking about the introduction of a digital euro, for example. Great. The last word is yours, Gizem, do you want to add anything to that? Nothing.

Thank you very much for the discussion. Great. Any final questions? I know I'm taking up time, but I know there are a lot of people who are a lot of people who might really want to ask a question. Here you go.

Let's get started. Thank you very much for the interesting discussion. I would like to ask a question about the concept of custody. We have a definition of custody in MiCA, and it is based on the concept of control. We currently have many providers in the market that provide MPC wallets, and the idea of ​​these wallets is that both parties—the client and the provider—independently hold shares of a private key.

And each party has to sign the transaction sign the transaction for it to be valid. So are the activities of MPC wallet providers considered custodial or not? A. A difficult question. Does anyone want to answer?

Any thoughts? Sorry. Normally, with such specific questions, I advise you to contact our partner bodies partner bodies . Because that's what it's about Really. No, I mean, to give you an answer, I don't...

answer, I don't... Okay. No, no, but I think it's a great question. It's one of the big questions that we all have to address. I don't think there's a clear answer yet, and that's why part of The consultation that is going on right now is about these ideas around DeFi.

What does it mean to have control over the protocol, over the wallet, etc. So I think that's one of the most important questions most important questions that I hope will be addressed in MiCA 2, but I don't think you'll find anyone, or if you do, they're lying. So don't trust them. We have time. Any last questions?

Yes. Sorry guys, I'm taking the initiative . Sorry. Thank you. I'm Christoph from Union Investment.

We're a German asset management company. Looking at stablecoins, they're currently defined as cryptoassets in MiCA. And most of our units, most of our funds are designated as UCITS funds, which is the highest quality category. And given that we're not allowed to use cryptoassets in UCITS funds, we would n't even be able to use stablecoins in the future to create, redeem, buy or sell assets. We even would not be able to accept a stablecoin for a microsecond in our portfolio, even just for the payment process.

France and Luxembourg have relaxed this kind of regulation, so they allow stablecoins to be used for exactly these purposes. From an ESMA perspective, can we expect that in the future stablecoins will also be supported in Europe as an instrument, and can we expect that for UCITS funds stablecoins can be used for payments? I think this is a question again for ESMA, but let's put it this way: from a banking perspective, EMTs are treated exactly the same as tokenized assets. So from a banking perspective, it's not a problem. So this is really more of a question for the financial market side, because I know that's not what we do.

And maybe just to add to Christophe's point of view, we already see some clarifications or introduction of additional definitions in MiCA of what EMT is in light of other European frameworks. So maybe that would be helpful at the beginning. However, the interaction between EMT and PSD services are still under discussion, but it would be useful to at least read the latest drafts latest drafts if they are available. How do they relate to the definition of money, etc. Indeed.

This is very recent news, but the European Parliament is advancing its negotiations on the MISP. That is, the Market Integration Supervision Package, and I can say that there are quite a few positive developments in that sense. So hopefully, if this version of the Parliament report does indeed become law, we will have some positive developments on the use of stablecoins in such cases. Yes. And I...

cases. Yes. And I... yes, please don't remind me of that remind me of that . I had to go through all of that.

So anyway, I think our time is up. As you can see, I could talk for hours on these topics. Please join me in giving our panellists a round of applause . Great. And thank you.