Passporting crypto services under MiCA
In a guest article for German Fin Law, specialist lawyer Lutz Auffenberg explains how crypto services are passported under MiCA.
In a guest postfor German Fin Law, specialist lawyer Lutz Auffenberg explains how crypto services are passported under MiCA.
The current regulation of crypto assets in the Netherlands and Europe is still largely regulated at the national level. Cross-border business models must therefore regularly be aligned with all applicable national regulations. One of the EU's main goals is to promote the European internal market and reduce legal barriers to cross-border cooperation within the European economy. So it's time to harmonize the EU's current crypto rules and bring the internal market to the crypto sector.
To this end, the proposed EU Regulation on Markets in Crypto-Assets sets rules for the uniform offering of crypto services across member states. Lawmakers have largely based the new rules for cross-border crypto services on the so-called EU passport for investment services. As a result, crypto service providers will be able to offer their services in other EU member states with relatively little effort, without needing extra licenses in the destination countries.
Requirements for MiCA passport
Providers that want to offer cross-border crypto services in the European Union must at least hold a MiCA license in one member state. The authority responsible for the passport process is, in the first instance, the authority that granted the MiCA license, i.e., BaFin in Germany. For a successful passport application, the crypto service provider must present the authority with a list showing in which specific member states particular crypto services will be offered.
Among other things, it must indicate which other, MiCA-not-covered business activities the crypto service provider will offer. This includes activities that are not regulated at all as well as activities that are subject to other licensing and supervisory regimes. Examples of this are payment services within the meaning of the Second Payment Services Directive (PSD2).
