EU Reaches Provisional Agreement on MiCA; EC Adopts Digital Strategy
The European Council presidency and the European Parliament reached a provisional agreement on the markets in crypto-assets (MiCA) proposal, which covers issuers of unbacked crypto-assets, “stablecoins,” and the trading venues and wallets where crypto-assets are held. In addition, the European Commission (EC) adopted a new Digital Strategy, which provides a corporate approach to further streamline the information technology initiatives, refocus on digital modernization, and provision of innovative services.
Under the provisional agreement reached, crypto-asset service providers will need an authorization to operate within the European Union. National authorities will be required to issue authorizations within a timeframe of three months. Regarding the largest crypto-asset service providers, national authorities will transmit relevant information regularly to ESMA. Non-fungible tokens—that is, digital assets representing real objects like art, music, and videos—will be excluded from the scope, except if they fall under the existing crypto-asset categories. Within 18 months, the European Commission will be tasked to prepare a comprehensive assessment and, if deemed necessary, a specific, proportionate and horizontal legislative proposal to create a regime for non-fungible tokens and address the emerging risks of such new market. MiCA rules will protect consumers against certain risks associated with the investment in crypto-assets and help them avoid fraudulent schemes. MiCA rules will also cover any type of market abuse related to any type of transaction or service, notably for market manipulation and insider dealing. Actors in the crypto-assets market will be required to declare information on their environmental and climate footprint. ESMA will develop the draft regulatory technical standards on the content, methodologies, and presentation of information related to principal adverse environmental and climate-related impact. Within two years, the European Commission will have to provide a report on the environmental impact of crypto-assets and the introduction of mandatory minimum sustainability standards for consensus mechanisms, including the proof-of-work. The provisional agreement is subject to approval by the Council and the European Parliament before going through the formal adoption procedure.
The new Digital Strategy is based on guiding principles, which will be reinforced by the update, such as digital by default and once-only, security and privacy, openness and transparency, interoperability and cross-border, and user-centric, data-driven and agile. The strategy strengthens internal cooperation and knowledge sharing between departments and with member states. There will be increased support for staff to boost their digital skills. The corporate strategy encompasses five strategic objectives:
- Foster a digital culture by empowering all staff and equip them with the necessary skills and tools to think "digital first," while encouraging cross-functional teams and collaboration, supported by a flexible and accessible digital workplace
- Enable digital-ready EU policymaking by ensuring digital technologies are considered from the very beginning of the policy cycle, making new policies fit for the Digital Decade
- Empower business-driven digital transformation by supporting EC departments in reinventing their business by leveraging innovative technologies and data reuse
- Ensure a seamless digital landscape by efficiently managing a streamlined portfolio of information technology systems
- Sustain a green, secure, and resilient infrastructure as the foundation of the EC's operations and new ways of working
Related Links
Keywords: Europe, EU, Banking, Securities, Crypto-Asset, MiCA, Stablecoins, Fintech, Regtech, Digital Strategy, ESG, Climate Change Risk, European Council, EC, ESMA, European Parliament
Featured Experts
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Hasan Cerhozi
Hasan leads Moody’s Analytics ESG methodology development. He is expert on carbon transition, nature related risks and is a guest lecturer at ESSEC Business school on sustainable finance.
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous Article
BNM to Conduct Climate Risk Stress Testing Exercise in 2024Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.