A Comprehensive Analysis of the European Union´s Fintech Laws in the Supervision and Regulation of Crypto Assets

Abstract

This dissertation analyzes how the European Union (EU) is able to regulate crypto-assets with the proposed Regulation on Markets in Crypto-Assets (MiCA). Crypto-assets havebeen regarded as one of the most disruptive advancements in finance and have beenableto operate without the use of traditional intermediaries and are able to challenge thecurrent regulatory frameworks. Besides the opportunities these crypto-assets bring for thefinancial sector, there is also the concern of financial stability, consumer protection, andintegrity of the market. These aspects also need to be considered with the use of innovative technologies. The approach to this research is both doctrinal as well as comparative. The research first describes the foundational concepts and technologies of crypto-assets and decentralizedfinance (DeFi) along with stablecoins and non-fungible tokens (NFTs). Afterwards theMiCA proposal is described in a certain detail. This is particularly in relation totheoverall EU financial regulation and its fulfillment to custody, disclosure, governance andlicensing aspects. To assess the extent of which MiCA is adequate, this dissertation reviews the pragmatics of the EU miCA with that of other major jurisdictions, like the US, the UK, andtheframeworks constructed by global organizations like the Financial Stability Board or theFinancial Action Task Force. Such a comparative analysis underscores a lack of a unifiedlegal framework especially with respect to DeFi, NFTs, and cross-border jurisdictional issues. The dissertation finds that MiCA is an integral building block towards the convergence of crypto-asset legislation in the EU. It decreases the confusion and discordant regulatorylandscape. However, it also maintains that MiCA is overlooking important elements likethe control of decentralized systems and the enforcement of anti-money launderinglegislation. Enhanced international collaboration and regulatory amendments will benecessary in order to foster the innovative frameworks that will ensure the stability of the financial systems.