ESMA publishes final guidance for MiCA implementation by December 30

The European Securities and Markets Authority (ESMA) has released its final guidance to help European Union (EU) member states implement the Markets in Crypto-Assets (MiCA) regulation.

This guidance is crucial as the MiCA laws, which came into effect in June 2024, are set for final implementation by December 30, 2024.

The final report aims to assist countries still uncertain about their regulatory approach to MiCA ahead of the deadline.

The stablecoin market has seen growth under MiCA's guidelines, but as of December 10, at least six EU member states—Belgium, Italy, Poland, Portugal, Luxembourg, and Romania—reported challenges in meeting the upcoming deadline due to a lack of clarity in the initial MiCA documents.

“Stakeholders generally appreciated the clarity of the draft guidelines and the comprehensive approach taken by ESMA. Several respondents highlighted the need for further clarity on specific criteria and conditions, while others expressed concerns about the potential administrative burden the draft guidelines might impose,” according to the ESMA’s final guidance report.

The feedback period saw active participation from member states and industry stakeholders, which led to the creation of 12 distinct concerns in the ESMA guidance.

The main concern was the potential for different interpretations of MiCA laws across member states due to insufficient explanations in the original documents.

ESMA addressed these issues by providing explanatory scenarios covering aspects of digital asset regulation.

However, the report clarified that MiCA cannot offer “real world” examples for the classification of specific assets like cryptocurrencies.

The report also tackled concerns about the EU’s MiFID II guidance, which has been criticised for not clearly defining crypto-assets as financial instruments.

In response, ESMA's guidance suggests refining MiFID II rules without changing the current definitions.