By: Janet Ho (Chainalysis)
On 10 October, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) voted to support the MiCA (Markets in Crypto Assets) Regulation provisional agreement reached on 30 June. The lawmakers from the Parliament’s ECON and LIBE committees also voted on the same day to support the Transfer of Funds Regulation (or TFR, also known as the Travel Rule).
TL;DR – What are MiCA and TFR?
We dove into detail on MiCA and TFR in our blog recently (Part1, Part 2), but in short, MiCA provides a new regulatory framework for exchanges, trading platforms, brokers, custodians, as well as token and stablecoin issuers that intend to operate in the EU. It covers, among other things, licensing, disclosure requirements, prevention of market abuse, and environmental sustainability requirements. TFR is the implementation of the FATF’s “Travel Rule”, which is the requirement, in most circumstances, to identify information on the sender and receiver in crypto transactions.
In this entry, we outline the key remaining steps of this legislative journey before full implementation. In our next entry, we will unpack the enumerated obligations for crypto asset service providers and stablecoin issuers, as well as how to prepare for MiCA/TFR implementation, including transitioning to MiCA if you are already registered or licensed in an EU country.
Where is the finishing line – or when can we expect full implementation?
The EU still has a few hills to climb before the legislative process reaches the finishing line. These include a final vote at the EU Parliament Plenary, translation of the final text into EU official languages, and publication in the Official Journal.
Should there be no further bumps on the road, both MiCA and TFR are expected to enter into force in Q1 2023. However, the entry-into-force date is not the same as the date when all the rules start applying. For that, two key timelines are particularly relevant to crypto asset service providers, crypto asset and stablecoin issuers…
