Cryptoassets are no longer foreign to traditional investors. On December 30, the MiCA Regulation (acronym for markets in crypto-assets) comes into force and opens the door to a much more extensive market under a regulation that establishes guarantees for consumers and a series of requirements for operators. Those who want to operate will have to have a license or registration with the National Securities Market Commission (CNMV), which has reinforced its authorization and supervision teams. Entities interested in its commercialization have been able to request it since September and it is known that CaixaBank, BBVA and Banco Santander have been preparing their respective offers. Although critical voices believe that this regulation goes against the alternative, decentralized and deregulated essence of investments in the world crypto, this is a pioneering standard thanks to which the entities that advertise, market and advise on these investments will have to be authorized. However, those that were already operating will have a period of adaptation. “It creates a safe environment for the cryptoasset market. Both financial operators and investors can count on protection and guarantees similar to those of the traditional market,” explains Enrique Nieto, partner at Uría Menéndez, who emphasizes that, despite these measures, there is no zero risk in investments. In fact, the European Securities and Markets Authority (ESMA) has recently issued a communication warning this. However, banks have it easier. “They have more favorable treatment, since they do not need an explicit MiCa license and can operate with their own banking license. Investment services companies or electronic money entities may provide cryptoasset services by notifying the competent authority in advance,” clarifies Alfonso López-Ibor, partner at López-Ibor DPM. The European regulation not only has effects on banking, but also on service providers, both exchanges or exchange platforms and custodians of electronic wallets and buying and selling or trading services. In addition, it affects issuers, including those that issue tokens (units of value) referenced to other assets and electronic money tokens; also to token financing platforms and advisors. Specialists highlight the impact on improving trust in stablecoins – tokens whose value is referenced to a real asset – by imposing reserve and capital requirements for their issuers. The conditions for operating have to do with solvency, the prevention of conflicts of interest, possible market abuse and use of privileged information. Likewise, transparency in information will improve, since there will be detailed information sheets and the consumer will be protected with the prohibition of misleading advertising, ensuring that they know the risks inherent to their investment. Additionally, rules on risks, governance and prevention of money laundering are established. All of this will translate into greater professionalization and legal security thanks to the structured development of the cryptoasset market, but it will have an impact on the entities. “Companies will have to assume an increase in compliance costs, with substantial investments in legal, technical and governance infrastructure,” warns Victoria Moreno, lawyer at López-Ibor DPM. This panorama, he recognizes, will be a greater challenge for entrepreneurs and small suppliers and, at the same time, will encourage competition between traditional actors, such as banks and fintechs, which will have to adapt to a market in which new regulated operators intervene. Security and trust They are two concepts that are repeated: they are the key for the market to reach more mass or senior profile segments. “There are clear rules of the game that benefit the development of the business. It is likely that they will be encouraged to buy their cryptocurrencies with a banking entity that has a prestigious brand, which can attract clients who do not feel comfortable investing in internet platforms that they do not know,” predicts Xavier Foz, partner at RocaJunyent. Regulation will mark a before and after and crypto assets will be more accessible. “If someone wanted to buy bitcoins, they did it through word of mouth. Now, in the bank's application they will offer crypto assets in the same way as other products, such as credit cards. Part of the public that did not dare to take the step will now invest with traditional operators,” predicts Enrique Nieto. Another advantage is that they speed up some procedures in other countries. Fernando Gutiérrez, partner at Bird & Bird, reiterates that “entities that are previously supervised are going to have a lighter procedure, they are not going to start from scratch, because they are already subject to supervision.” Furthermore, it highlights that MiCa, like other European regulations, provides for the creation of a kind of passport, so that when you are authorized in a Member State of the European Union, there is a long way to go to enter other European markets. “Spanish entities request it through the Spanish supervisor, who manages it with his counterpart in the country in which they want to operate,” he explains. The entry into force of this regulation is a first step and everyone agrees that the rule will be followed to update and improve over time. “There will be a possible overhaul or a MiCa 2, as assets like NFTs (non-fungible tokens, which represent something unique) or decentralized finance are out. But it is better to have regulations, even if they are imperfect,” says Xavier Foz. By relying on technology that evolves so quickly, it is almost certain that in a few years there will be assets that fall under your radar. Europe will have to rise to the occasion with regulations adjusted to what the future dictates.
Operator adaptation
When the MiCa regulation begins to apply, entities that operate without authorization will have to adapt and only some will be able to benefit from the transitional regime whose duration the Government has reduced from 18 to 12 months, to conclude on December 31, 2025. The CNMV has confirmed that This decision has already been communicated to the European Securities and Markets Authority (ESMA). Suppliers that provide services in Spain without being able to benefit from the transitional period may be sanctioned and will be included in the list of unauthorized entities or “financial beach bars.”