- EU countries can attract virtual currency ventures using their own rules.
- With MiCA looming, some countries are ahead of others.
- The December deadline may be extended depending on the situation.
As the implementation date of the European Union's cryptocurrency rulebook approaches, regulators and crypto companies are running out of time to plan for this innovative regime.
Within 12 months, the Market in Cryptoassets Regulation (MiCA) will allow cryptocurrency companies to apply for a license in one EU member state and gain access to all remaining member states.
This means crypto platforms can instantly do business across the EU's $19 trillion market.
But this opportunity brings with it a big problem. Which country should a cryptocurrency company settle in?
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Attracting virtual currency companies
Finding the answer is complicated, as national regulators have leeway to adjust their own rules based on MiCA, and many are devising ways to attract crypto companies.
Elizaveta Palaznik, an independent consultant specializing in MiCA, said: “If a country already has experience with certain types of services, it makes a lot of sense to continue to attract those services.'' ” he said. DL News In a live interview.
For example, Luxembourg is already attractive to investment funds, Palaznik said. The Grand Duchy, which borders France and Germany, is home to 3,600 investment funds, including crypto funds.
ireland plan
Irish regulators are known to be friendly to big tech companies and digital finance. This is why companies such as Coinbase and Ripple have chosen to settle in Dublin ahead of MiCA's implementation later this year.
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Palaznik pointed out that France is attracting trading platforms and exchanges. And Malta attracted the Web3 gaming platform.
In fact, France and Malta have already introduced systems similar to MiCA. As such, companies currently registered there may have less difficulty obtaining crypto licenses when MiCA goes live.
MiCA was passed into law last summer after years of negotiations among lawmakers and is considered the first comprehensive bespoke cryptocurrency regulation in a major jurisdiction. Regulators are preparing to implement the new law in the coming months.
“grandfather”
MiCA's crypto licensing regime is scheduled to come into force on December 30th, but provisions in the regulation will still allow European countries to choose whether to give crypto companies an additional 18-month grace period to adapt. This is known as “grandparenthood.”
Companies already registered with the regulator will be given an additional period to provide services in the country and prepare for the new, stricter licensing regime.
If a country chooses the full 18 months, crypto platforms must become MiCA compliant by July 1, 2026 at the latest.
“I've heard rumors that in Luxembourg, regulators' working hours will be from 6pm to 12pm. [months]'' Palaznik said, adding that Ireland and Austria also opted for an additional 12-month transition period.
However, Lithuania will not provide any additional transition period for crypto companies. Lithuanian authorities announced in December that they were tightening requirements for cryptocurrencies “to manage risks.”
In October, the European Securities and Markets Authority, which oversees the implementation of MiCA, asked national authorities to minimize the exemption period and limit it to 12 months.
“As far as I can tell, some regulators, as well as some regulators, really want to make this December 30 deadline a certainty for crypto companies,” Palaznik said. “So companies already know what they need to do.”
See the full conversation between DL News'Regulation correspondents Inbar Preiss and Elizaveta Palaznik here:
