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Happy New Year! Inbar here.
Europe blazed ahead with crypto regulation in 2023 — and there’s more coming.
Here’s what to look out for in 2024.
Regulators tie up loose ends, MiCA comes into force, DeFi report to come
In 2024, the EU’s financial watchdogs will publish their final set of consultations to fill in the remaining details of the Markets in Crypto Assets regulation before it goes live.
- January/February: The European Securities Markets Authority will publish a consultation on investor protection and market abuse.
- February: The European Banking Authority will publish a consultation on redemption plans.
- June: Joint consultation on classification of crypto assets.
This first phase of MiCA will kick in from June, when rules addressing stablecoin issuers go live.
Stablecoin issuers will have new prudential, liquidity, and disclosure requirements. They must also publish a whitepaper for each crypto asset available for trade on exchanges.
The second phase of implementation follows six months later, and deals with the licensing of crypto asset service providers.
That means firms must comply with rules on capital requirements, internal controls, and governance — unless their home countries choose to extend the transitional period to mid-2026.
The Transfer of Funds Regulation, aimed at tackling anti-money laundering, will be enforced at the same time.
- June 30: MiCA’s stablecoin rules go live.
- December 30: MiCA and TFR rules go live
MiCA doesn’t include rules for DeFi, but the regulation compels the European Commission to publish a report assessing DeFi markets. That could be followed by a legislative proposal.
The report is due 18 months after MiCA came into force in June, so we can expect a report by the end of 2024.
- December: The estimated publication date for the EU Commission DeFi report.
Blockchain infrastructure push
With a push from the Belgian digital minister, the European Commission is due to launch a new political body — the European Digital Infrastructure Consortium.
The consortium will roll out a European Union-wide blockchain to revamp public infrastructure.
- January 1: Belgium takes six-month presidency of the Council of the EU.
- February: The estimated launch date of the consortium.
AML rules for DeFi
EU lawmakers weren’t able to finish negotiating a bill on anti-money laundering in 2023. So now we look to 2024.
The bill covers decentralised autonomous organisations, non-fungible token platforms, and decentralised finance platforms. There are also restrictions on self-hosted wallets.
Negotiations are set to begin again, and could wrap up in January.
- January 17: The — possibly final — trilogue negotiation takes place.
- April: The estimated date when the European Parliament may conduct a plenary vote on the regulation.
Digital finance rules
Lawmakers in the European Parliament are working through several digital finance bills.
These bills set controls on how customers and companies handle financial data, and draft rules for payment services.
Stablecoin issuers and some crypto asset service providers are included. Legislation on the controversial digital euro is also still on the table.
The Economic and Monetary Affairs Committee is due to vote on:
- January 29: The third Payments Services Directive and Regulation.
- March 21: Regulation for Financial Data Access.
DORA
The Digital Operational Resilience Act comes into effect after MiCA goes live at the end of 2024.
DORA will force crypto service providers to regularly report to regulators, and prove they can manage technology risks.
- January 17, 2025: DORA applies.
Email the author at inbar@dlnews.com.
