MiCA final vote is postponed due to translating issues

The final vote for the European Union’s crypto regulation bill, MiCA, has been postponed until April 2023 due to technical difficulties.

The Markets in Crypto Assets Regulation (MiCA) was designed to establish the very first common licensing regime for crypto wallets and exchanges looking to operate in the European Union. The scope of MiCA covers issuers of unbacked crypto assets, stablecoins, trading venues, and wallets alongside rules to reveal the identity of persons transacting cryptocurrencies. 

In June 2022, the European Council and European Parliament reached a provisional agreement on MiCA, marking the first comprehensive EU stance on cryptocurrencies. The move came a day after the European Council, European Parliament, and European Securities and Markets Authority (ESMA) finalised measures aimed at decreasing money laundering in crypto. 

MiCA also aims to regulate insider trading, unlawful disclosure of inside information, as well as other market manipulation attempts related to cryptocurrencies to preserve the integrity of the market. Under MiCA, crypto operators will have an obligation to declare information on the environmental footprint, even though no ban on a proof-of-work consensus mechanism is stipulated in the regulation.  

Initially, the bill was supposed to be submitted to a final vote in November 2022, but the vote was delayed to February due to a series of translating issues. In the EU, legal acts such as MiCA are required to be made available in all the bloc’s official languages. Translating the nearly 400-page file into the 24 official languages of the bloc proved challenging, which is why the vote has now been postponed once more, this time until April 2023.

Transfer of Funds Regulation (TFR) vote was also postponed 

MiCA will be complemented by a Transfer of Funds Regulation (TFR), which requires crypto transfers to include know-your-customer systems on both the receiver and recipient sides. However, the vote for TFR has also been postponed until April 2023. 

By delaying the vote, EU officials also move up the timeframe for the implementation of MiCA, as European Securities and Markets Authority and the European Banking Authority have 12 to 18 months to draft the technical standards after the bill has been approved.

In light of this, the earliest MiCA legislation will now come into effect in April 2024. Furthermore, before it can have any true impact, the law needs to be signed off by lawmakers and national governments that make up the EU's Governing Council. Once it does pass, national regulators will have a say when it comes to the interpretation and implementation of the law.