Top European tokenization platform, Tokeny, has distributed an email highlighting the fact that MiCA or Markets in Crypto Assets regulation, does not regulated digital assets which are securities or other financial assets.
MiCA goes into force on June 30, 2024. The EU regulation provides rules for digital assets like crypto which provide utilities, stablecoins, NFTs and other non financial assets.
Tokeny states:
“MiCA introduces comprehensive measures to regulate the crypto-asset market, providing much-needed clarity. However, it’s important to note that MiCA does not apply to crypto-assets qualifying as financial instruments, such as transferable securities. These assets continue to fall under the existing regulatory framework of MiFID II (Markets in Financial Instruments Directive II). This provides clear guidance to securities’ issuers.
In contrast, MiCA imposes significant new requirements on utility tokens and stablecoins, fundamentally changing how these assets can be issued and managed. Most cash equivalent tokens currently use the ERC-20 token standard, which lacks owner identification capabilities. Under MiCA, issuers might need to consider a transition to the ERC-3643 token standard to issue permissioned tokens, enabling the necessary compliance features such as owner identification and additional controls.”
As was previously reported, ESMA [European Securities and Markets Authority] has launched a consultation on digital security regulation which should advance the future of securities.
As for Tokeny, they note that providers of crypto services must be licensed (CASP or crypto asset service provider) – which is described as a costly process. At the same time, the MiCA rules provides regulatory clarity for digital asset participants including Tokeny. The company shareds that they are well positioned to benefit from both MiCA rules as well as digital securities. Tokeny describes the advancement of digital assets a “historic moment for Europe” as it may be able to position itself as a global tokenization hub.