Skip to content
Home » MiCA Regulation Opens Crypto to Banks

MiCA Regulation Opens Crypto to Banks

MiCA Regulation Opens Crypto to Banks

Experts expect the crypto market to grow thanks to this regulation, which strengthens end-investor protection.

As of December 30, 2024, the MiCA regulation will come into force for new service providers in the cryptoasset market. The European Union must authorize them to operate throughout the region. For companies already providing services related to digital assets on that date (December 30, 2024), they would give a transitional period to adapt to the new conditions of the European regulation. During this time they can continue to develop their activity which will end on December 30, 2025.

This authorization for service providers in the cryptoasset market represents a crucial change in a highly volatile, high-risk ecosystem and a breeding ground for cybercrime. Until now, Spain only required cryptocurrency custody and exchange platforms for fiat money to register with the Bank of Spain for money laundering prevention purposes.

However, as Christian Menda, senior account director at Chainalysis, points out, the verification process for this registration is not very thorough. That changes with MiCA. Joaquín Sastre Ibáñez, chief revenue officer at Boerse Stuttgart Digital explains it is no longer just a matter of requesting authorization. “When you are on the list of crypto service providers, your compliance with MiCA will be reviewed. Once you obtain the license, you must maintain it over time, and will require powerful legal compliance teams to be on the ball.”

The Swiss example

This new regulation sets the same rules for everyone. “Mica was what we were all waiting for to be able to operate in this market,” reveals Francisco Maroto, head of blockchain and digital assets at BBVA. The expert points out that getting the license to provide services related to cryptoassets will be an element of differentiation and trust for users and predicts that there will be a race to get it before the others. BBVA already provided crypto-asset custody services in Switzerland since 2021. The entity opted for this country, according to Maroto, because it was the only one with regulatory clarity on crypto services. “The project is very positive and has allowed us to demonstrate to the bank that we can enter this market in a safe and regulated way,” he says.

Turkey is the other country where BBVA is developing this activity, although for different reasons. “There is no clear regulation there, but it is a service in great demand by the population given the country’s galloping inflation,” he explains. In Spain, the interest in crypto-assets is much lower. He is confident that as regulation evolves, it will grow, so he confirms that “we will be there. It is our strategy.” He adds, however, that they will not be the only ones since the other large banks, until now, for the most part, quite reluctant to enter this market, have changed their minds thanks to Mica.

Towards normalization

Regulation of this sector is likely to lead to the normalization of this type of investment,” predicts Manuel Lopez, banking and finance partner at Eversheds Sutherland. As the lawyer explains, this means the entry of players that do not currently operate with crypto, institutional investors (such as investment funds, pension funds, or insurance companies), and financial institutions will offer these products to retail customers. “By eliminating legal uncertainties, new players enter, and the market grows,” concludes the lawyer. He also points out that the European regulation gives an advantage to already regulated entities (banks, securities agencies, management companies, etc.) over crypto service providers by establishing a faster and simpler procedure for them to obtain MiCA authorization.

On the other hand, Ariel Navarro, chief executive officer at Whale Capital, points out that regulation will also help the market to grow from the users’ point of view since it provides them with protection (the consumer rights of withdrawal and reimbursement that apply to other financial instruments) simplifies the system and gives them access to types of assets that they could not reach before. Even so, the expert is cautious about this standardization process and states that, although adoption by financial institutions will go hand in hand with regulation, it will probably be slower than expected.

User rights

Withdrawal. The right of withdrawal regulated in this European standard implies that retail holders acquiring crypto assets can withdraw from the transaction 14 days after its acquisition.

Refund. Issuers of asset-backed tokens (those referring to the value of several fiat currencies or assets) must redeem them at any time at the request of the holders at the market value of the referenced assets or by delivering them. Likewise, for asset-backed and electronic money (referencing the value of a legal tender fiat currency,) their issuers must establish recovery and redemption plans if they fail to meet their obligations.

Leave a Reply