The EU MiCA Directive – chances and risks from a compliance perspective

Abstract

Purpose This study aims to review the current EU approach to regulating crypto assets. It highlights the key points, opportunities and risks of the MiCA regulation, which is designed to provide a comprehensive regulatory framework for digital assets in the EU. Design/methodology/approach To do so, the authors extensively reviewed the literature and reports from several advisory and watchdog bodies and international organizations. Findings Although MiCA is an ambitious piece of legislation, there are still many unresolved issues and questions that the new regulation raises. Controversially several items have also been excluded from the MiCA regulations, including decentralized finance, non-fungible tokens unless they qualify under the existing cryptocurrency categories, as well as central bank digital currencies. Originality/value This study also addresses the Liechtenstein Token Act Regulation, which is considered to have served as a model for the EU MiCA Directive and the regulation of cryptocurrencies at the European level.