Reflection on MiCAR and Its Alignment with Existing EU Financial Markets Legislation

by | 15 Nov 2023 | Editorial

Alessandra Tugnolo, CEO of The Glass Elite, participated in the event “MiCAR and its coordination with existing EU financial markets legislation” held at the Banca d’Italia in collaboration with Ca’ Foscari. This article presents her in-depth reflections on crucial issues related to aligning MiCAR regulations with the existing financial legislation in the European Union. Her insights provide a significant perspective, contributing to understanding critical points and emerging challenges in the current regulatory landscape.

The significant gap… but it’s a starting point“. This is perhaps an extreme summary of the discussions during a highly engaging conference organized by Ca’ Foscari University on MiCAR regulations at the Banca d’Italia headquarters in Venice. Professor Filippo Annunziata’s statement refers to the lack of a clear and defined taxonomy that aids in interpreting the regulation. In reality, the discussions almost unanimously highlight how the regulation exhibits internal inconsistencies and insufficiently defined boundaries with other regulations, such as MiFID, making the path for operators quite challenging. It constitutes an essential starting point, even though it conflicts with the regulator’s stated objectives of being a functional regulation to the development of startups operating in the crypto sector. The costs and basic parameters are decidedly too high for startups to afford. It remains a starting point, even though instead of declaring what it deals with, it explicitly declares what it does not cover, such as certain foundational elements in the Crypto world, like NFTs. It remains a starting point even though it does not cover Decentralized Finance,yet the theme is precisely how to define a perimeter to operate peacefully in a market completely disruptive compared to those in which institutions, banks, and international operators have operated in the past and still operate. It is also a starting point in that thanks to this regulation, legal, institutional, academic, and crypto industry operators converge on certain aspects.

What are these aspects?

  1. The slowness of its interpretation and application. It will not be fully operational for the next 18 months. Too long for a market where what was born three months ago is considered old.
  2. The incompleteness and multiple contradictions and gaps do not allow for a precise definition of the operating perimeter without falling into regulations related to financial instruments and, in Italy, financial products.
  3. In the face of a diverse and fragmented international legislative landscape, imposing a European standard from above that does not consider the specific peculiarities of each country where it must be applied is complex and potentially dysfunctional. The application and development of activities in the crypto world will, therefore, remain kaleidoscopic in Europe for a while.

A conference of the highest level with internationally renowned speakers, excellently coordinated by Professor Andrea Minto, covering topics from CBDC to AML, from DeFi to centralized ecosystems. Will we meet in Venice to discuss this in a couple of years? Hopefully sooner, because this is a starting point, but the market does not wait.

TGE Staff

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