@Dusk #dusk $DUSK The European Union’s Markets in Crypto-Assets Regulation (MiCA) represents a landmark legal framework intended to bring clarity, investor protection, and harmonised rules to digital asset markets across the EU. A recent primer from Dusk Network breaks down the key terminology used in this legislation — essential for blockchain projects, service providers, and investors engaging with the EU market.
What Is MiCA? A Quick Overview
MiCA is an EU regulation (Regulation (EU) 2023/1114) designed to provide a comprehensive legal framework for crypto-asset markets in the European Union that were previously unregulated by existing financial laws. Its goals include:
Harmonising crypto rules across all EU member states.
Enhancing investor protection and market integrity.
Regulating issuance and services relating to crypto-assets that fall outside older financial frameworks.
MiCA officially entered into force in June 2023, with phased implementation of its provisions through late 2024 and into 2025.
Key Terms Defined in MiCA (Per Dusk Explanation)
1. Crypto-Assets and Their Categories
MiCA starts with legal definitions, and Dusk highlights how these differ from common industry terms:
Electronic Money Token (EMT): A distributed ledger technology (DLT) token used as a medium of exchange with its value tied to a single fiat currency (e.g., stablecoins pegged to the euro).
Asset-Referenced Token (ART): A DLT token tied to multiple assets such as currencies, commodities, or other tokens.
Utility Token: A token whose primary use is gaining access to a specific service from its issuer.
Cryptocurrency (General Category): A token used mostly as a medium of exchange (e.g., BTC or ETH) that doesn’t otherwise fall into the above legal classifications.
Important Clarifications:
“Stablecoin” and “asset-backed token” are not legal terms under MiCA — instead they’re folded into EMTs or ARTs based on backing.
Algorithmic stablecoins and security tokens fall outside MiCA’s scope: the former is not recognised as a true ART; the latter is covered by existing securities laws.
2. Crypto Asset Service Providers (CASPs)
MiCA applies not only to token issuers but also to businesses offering services involving those tokens. The regulation defines Crypto Asset Service Providers (CASPs) as firms providing activities such as:
Custody and administration of crypto-assets for others.
Crypto exchange or trading services.
Crypto investment advisory services (distinct from portfolio management).
CASPs must be authorised by a national regulator in an EU member state to operate legally — and that licence can be used "EU-wide" under MiCA’s passporting regime.
3. Supervisory Bodies Within MiCA
MiCA sets out roles for different authorities:
European Banking Authority (EBA): Supervises Electronic Money Tokens (EMTs) and, for “significant” issuers, Asset-Referenced Tokens (ARTs).
European Securities and Markets Authority (ESMA): Supervises ARTs and assists in coordinating enforcement.
National Competent Authorities (NCAs): Each EU state designates authorities to supervise issuers and CASPs locally.
Why These Terms Matter
MiCA’s purpose is not just to regulate, but to standardise language so that obligations — from licensing requirements to investor protections — are enforced consistently across the EU. Precise legal definitions affect:
Whether a token project must comply with MiCA at all.
What obligations CASPs and issuers have regarding transparency, capital requirements, and compliance.
How supervisory powers are distributed across EU institutions and member state regulators.
Recent Context & Developments
Since MiCA’s implementation:
The regulation has become fully applicable in the EU, including obligations on CASPs and stablecoin issuers.
EU regulators like ESMA have warned firms against misleading customers about regulatory status under MiCA, reflecting active market oversight.
Some EU countries have debated centralising oversight rather than relying on national regulators under MiCA’s framework.
There is discussion among individual member states about passporting and licensing consistency, highlighting implementation challenges.
In Summary
The Dusk Network’s primer on key MiCA terms provides a foundation for understanding how the EU defines:
What constitutes a crypto-asset,
Who counts as a service provider, and
Which authorities enforce the rules.
These distinctions — while legalistic — have material consequences for compliance, licensing, and how firms and tokens operate across one of the world’s largest digital asset markets.
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