The European Markets In Crypto-Assets Regulation (MiCA) And Its Implications For The MFSA And Malta – Fin Tech

On the 6^th of October, the Malta Financial Services
Authority (‘MFSA’) gave an overview of the anticipated
impact of the provisional agreement reached by the Council
presidency and the European Parliament on the MiCA proposal. Such
development is regarded as significant since it aims at creating a
harmonised regulatory framework for crypto assets at EU level. In
turn, this framework would protect investors whilst ensuring market
integrity and preserving financial stability.

The sections within MiCA which relate to crypto-asset service
providers will be enforceable 18 months after the Regulation’s
enactment which is expected to take place within the first quarter
of 2023. MFSA’s Head of FinTech Supervision, Mr Herman Ciappara
and analyst Samantha Cuyle explained that since MiCA is directly
applicable, this will inevitably translate in the repealing of the
local Virtual Financial Assets regime. As such, in preparing for
the entry into force of MiCA, the MFSA is currently undergoing an
exercise in bridging the gaps between MiCA and the local framework
in order to ensure a smoother, seamless transition.

Locally authorised entities in terms of the Virtual Financial
Assets regime are expected to benefit from the fact that the local
framework and MiCA are both rooted on the MiFID framework and as
such, the MFSA anticipates minimal impact on such entities.
Additionally, the MFSA anticipates that the regulatory experience
in authorising and supervising crypto-asset market participants
garnered over the past years will put Malta at the forefront within
the sector.

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