On January 1st, the CNMV began accepting authorization applications from companies intending to operate under the MiCA Regulation, and therefore wishing to issue, trade, provide custody services, or advise on cryptocurrency investments. In the case of Spain, the transitional regime (known in English as the grandfathering period) will apply to entities that were already operating in the crypto-asset market before the MiCA Regulation came into force and that do not have the required authorization under the new regulatory framework. These entities will only be allowed to provide exchange services between cryptocurrencies and/or with fiat currencies, as well as custody services for the former, while being subject to anti-money laundering legislation. Initially, this period was set for a duration of 18 months from its entry into force, but the Spanish government expressed its intention to reduce it to 12 months, with an estimated expiration date of December 31, 2025. However, it is important to note that this government intention has not yet been formalized in specific regulations.
The main objective of this transitional regime is to facilitate the adaptation of existing entities, covering a wide range of operators in the crypto sector. It therefore includes:
It is also unclear what will happen to companies that do not comply with the MiCA Regulation, but it is most likely that the Bank of Spain will revoke their authorizations to operate in Spain.
The main advantage of the MiCA regulation is to provide legal certainty and transparency to a market that has so far operated without any regulation, which has led to fraud and scams, some of them very significant. In this regard, the European Union has moved ahead of other key players in the financial markets, such as the U.S., Great Britain, and Japan, whose legislators are considerably behind or face a plurality of regulatory bodies with differing policies and criteria, as is currently the case in the U.S. Nevertheless, the regulation is likely to be adopted by a significant number of countries, as it represents a highly advanced regulatory framework in this area. Regarding "Utility tokens", they will remain unregulated for some time, as they cover a wide range of activities (artworks, corporate or real estate assets, etc.) that are not considered investment products. The so-called "Security tokens", however, will clearly fall under the Securities Market Law, which provides sufficient guarantees and investor protection.
Within the framework of the MiCA regulation, companies that trade crypto-assets must comply with a series of fundamental obligations. Among them, the prior authorization to operate stands out, which involves obtaining a license or registration from the competent national authorities (in Spain, the CNMV) and meeting solvency requirements, preventing and avoiding conflicts of interest, or complying with certain requirements regarding market abuse and insider information. Banks constitute a special case, as they do not need an explicit MiCA license and can operate with their own banking license. Investment service companies or electronic money institutions may provide crypto-asset services by previously notifying the competent authority. It is evident here that banks receive more favorable treatment under the MiCA regulation.
Furthermore, regarding the issuance of crypto currency in organized markets, these entities must comply with transparency and information requirements, which include the preparation of a detailed whitepaper. Consumer protection constitutes another essential pillar, requiring the avoidance of misleading advertising and ensuring that clients fully understand the inherent risks of crypto-assets. In this regard, the CNMV has recently repealed its article on cryptocurrency advertising, considering that this matter is sufficiently regulated under the MiCA Regulation. Moreover, it establishes as an essential requirement to act with honesty, impartiality, and professionalism, always in the best interest of clients, so that crypto-asset providers must offer impartial, clear, and non-misleading information. In this sense, the MiCA regulation sets transparency and information requirements related to the issuance, public offering, and admission to trading of crypto-assets on a crypto-asset trading platform.
Regarding the impact on the financial sector, the MiCA regulation introduces greater professionalization and legal certainty by establishing the foundations for a more structured development of this market. Its entry into force will lead to increased competition among traditional financial sector players, such as banks, which will have to adapt to a market with new regulated competitors. The impact is particularly significant on "stablecoins", as it imposes strict reserve and capital requirements on issuers, which strengthens confidence in their use. The majority opinion points toward market consolidation, as many small companies will disappear due to the new regulation bringing numerous administrative compliance obligations, which only companies with significant financial resources and a considerable number of specialized employees will be able to meet. Market concentration will increase as large European banks show interest in this sector. The MiCA regulation is a typical Brussels-made regulation designed in favor of France, Germany, and other northern European countries, while ignoring the needs of economies populated by small entrepreneurs and businesses, such as the Spanish economy, which will face great difficulties in surviving in this environment.
Finally, the MiCA Regulation includes in Article 61 a restrictive regime for contracts with providers and companies from third countries "at the exclusive initiative of the European client" ("Reverse solicitation"). This term means that a company from a non-EU country does not require a MiCA license if an EU client initiates, on their own exclusive initiative, a regulated service from the non-European company. In this regard, ESMA (the European regulatory authority) has published recommendations for the application of these articles by Member States. These recommendations or directives are particularly strict, and examples of violations of Article 61 include:
The effect of these guidelines will be to greatly hinder access to cryptocurrency service providers from the U.S., the U.K., China, and Australia, unless they establish a company or a branch in an EU Member State that obtains the corresponding license. Moreover, this will undoubtedly harm countries such as Spain and the United Kingdom, where websites use Spanish and English—languages that are official in many other countries.