The Markets in Crypto-Assets (MiCA) regulation will become a reality in 2024 and will have a significant impact on the sector. During the 9th Securities Services Conference organised by Cecabank and Expansión, with the collaboration of FundsPeople, industry experts analysed the most relevant aspects of the implementation of MiCA and the institutions that will be most affected.
Diego Villafáñez Sagardoy, consultant to the Technical Cabinet of the General Secretariat of the Treasury and International Finance, identified three areas where it should have an impact: "Firstly, regulated assets, most of this regulation is directed at stable coins (currencies referenced to another asset class), therefore MiCA will regulate to ensure that the issuance of a stable coin is backed by such an asset; secondly, a series of market integrity standards; and thirdly, the regulation of agents that will provide crypto-asset services".
Outside of MiCA, the regulatory landscape is very broad: the European Commission will commence work on opening up capital requirement rules; moreover, Dora will require institutions to have a compliance framework in terms of security, etc. This role of the regulator will touch on the supervision of crypto assets as much as any other factor, with the objective of minimising situations such as Celsius or FTX. In this role as supervisor of cryptocurrencies, what will the transition look like?
Francisco del Olmo, Deputy Director of Fintech and Cybersecurity at the CNMV, believes that MiCA will "provide a regulatory framework that will create the capability to guarantee a level of protection to investors in these assets". However, if we compare it with the current regulatory framework, it is very different, says the expert. "Mica will provide the tools and the regulatory framework, but it will be up to the supervisors to introduce the supervisory mechanisms in order to ensure investor protection. This leaves 12 months for stable coins and 18 months for service providers. We are also involved in second-tier development", he warns.
The role of financial institutions
Every institution is preparing for this, but will it also affect the compliance areas of financial institutions? Gloria Hernández, partner at FinReg 360, compared MiCA to MiFID but for crypto-assets, since in her opinion "it regulates the same services that MiFID regulates for financial instruments, but the underlying instrument is crypto-assets". At this point, all those traditional financial institutions that want to venture into this world "will have to take steps to adapt their business, also in terms of regulatory compliance, as it involves a lot of work".
On this last point, the expert stressed that it is very important for business and regulatory compliance to be communicating vessels, not watertight compartments. "We all need to work together to bring about this adaptation of traditional finance to this world. On the other hand, institutions will have to focus on the prevention of money laundering, in that as traditional financial institutions, this is their biggest concern", he warned. Hernández has no doubt that it will be an "opportunity for traditional institutions, in that the entry of the financial sector into this world will bring more security and seriousness", he said.
In this regard, Ana Santillán, Fireblocks' sales manager for Switzerland, Spain, Italy and Portugal said that "the fundamental role of a service provider is the security framework around the cryptographic private key". But in her opinion it has gone beyond that: "Providing security through all the processes that can be automated. This reduces risks and enables us to implement processes more reliably. This is where we are trying to help", she explained.
