Regulators Weigh Up ‘Serious Cohesion Issues’ Between MiCA, PSD2

September 27, 2023
Officials at the European Banking Authority (EBA) and the National Bank of Belgium are facing “serious questions” about the cohesion of the EU’s new crypto framework and its payment services regime.

Officials at the European Banking Authority (EBA) and the National Bank of Belgium are facing “serious questions” about the cohesion of the EU’s new crypto framework and its payment services regime.

In June 2024, the Markets in Crypto-Assets (MiCA) regulation will come into effect for stablecoins, and in December 2024 the rest of MiCA’s will provisions will come into effect.

Anne Chamberod, legal prudential adviser at the National Bank of Belgium (NBB), said the agency has received questions from industry regarding the interaction between MiCA and other regulations, such as the second Payment Services Directive (PSD2).

Speaking at Blockchain For Europe’s 2023 summit in Brussels, Chamberod said that the "difficult application of PSD2 to the crypto ecosystem" is a question that often comes up.

In particular, she mentioned e-money tokens (EMTs) as a point of concern. Under MiCA, EMTs are one of three categories of crypto-assets, and they are defined as crypto-assets that purport to maintain a stable value by referencing the value of one official currency.

"We do have a lot of questions as to 'do I need to apply for a MiCA licence or for a PSD licence?', or 'do I provide customer services for EMT only?', 'do I need to apply strong customer authentication to EMT accounts?'," said Chamberod.

"These are the types of questions that are key for the sector but also for the regulator."

Elisabeth Noble, senior policy advisor at the EBA, has observed similar issues. She said that there is a "serious cohesion question" as to how to define a crypto-asset transaction, and whether or not PSD2 or future legislation is "engaged" in this area.

"When we're looking at transfer services for crypto, we will need to have some serious discussion to provide some guidance around interpretation of the provisions and which segments of legislation are engaged," she said.

"None of these pieces of legislation exist in isolation, so we need to look very carefully at the range of services offered to then give a consistent steer to the industry about our expectations for compliance.”

On the plus-side, Chamberod said that she is grateful that these questions are being discussed now, while EU firms still have time to prepare for MiCA.

"Hopefully, most of the issues are solved before those provisions enter into force,” she said.

Confidence in MiCA still high

Nonetheless, the crypto industry is still optimistic about the implementation of MiCA, with sources telling Vixio that they expect it to bring more investment from US firms in the EU.

Tom Duff Gordon, international policy vice president at Coinbase, said that MiCA shows that the EU is recognising the “potential and societal promise that emerging technology can provide.”

“The EU is stepping up to the mark, while other notable jurisdictions are struggling to provide a solid, cohesive regulatory framework that gives clarity to a burgeoning innovative industry,” he said. 

Richard Teng, head of Europe at Binance, said that MiCA marks a major step forward for the EU and brings “regulatory clarity to one of the largest markets in the world”. 

Caroline Malcolm, Vice President of global public policy Chainalysis, said that “Europe should be very proud of what they have achieved with MiCA”.

“From the industry perspective, people can complain about bits and pieces, but this is the most comprehensive piece of legislation and can really take industry to the next level,” she said.

To allow crypto to “really open up”, Malcolm said that the certainty of a regulation like MiCA is necessary.



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