A series of regulations included in an EU-wide legal framework on cryptocurrency took effect on December 30. The interventions aim to inform investors in the crypto asset market about potential risks, ensure stability in the existing currency network, and explore prospects in the field.
The new regulations, incorporated in the Markets in Crypto Assets (MiCA) of the European Securities and Markets Authority (ESMA), will affect three categories:
Electronic Money Tokens
Cryptographic assets specifically designed to stabilize their value by being directly linked to a single official currency are categorized as “electronic money tokens.” These assets aim to offer predictable value tied to a fiat currency, such as the euro or the dollar, making them a popular choice for users seeking minimal volatility in the cryptocurrency space.
Asset-Referenced Tokens
These cryptographic assets stabilize their value by linking it to another value, right, or a combination of such references. This category often includes a mix of one or more official currencies and other assets. Known as “asset-referenced tokens,” they provide a broader foundation for value stabilization and may appeal to users looking for diversified underlying supports.
Other Cryptographic Assets
This group includes all cryptographic assets that do not fall under the categories of electronic money tokens or asset-referenced tokens. These assets are not tied to specific stabilization mechanisms and may serve various purposes, such as speculative investments, utility functions, or decentralized finance applications.
The new MiCA Regulation (Markets in Crypto-Assets Regulation) emphasizes that investing in cryptocurrencies remains inherently risky due to the significant price volatility these assets can experience. The European Securities and Markets Authority (ESMA) has also highlighted that, despite the new measures introduced by MiCA, the level of investor protection is weaker compared to traditional investment products.
Beyond the provisions of MiCA, which are already in force, the Greek government is advancing additional measures to safeguard cryptocurrency investors through a draft bill aimed at strengthening the capital markets. Presented to the Cabinet on Friday, the proposed legislation includes:
Designation of Supervisory Authorities: Depending on the case, regulatory oversight for cryptocurrencies will be assigned to either the Hellenic Capital Market Commission or the Bank of Greece.
Criminal Provisions: The bill introduces penalties for illegal activities related to cryptocurrencies.
Future Tax Framework: As previously announced, a specific legal framework for taxing cryptocurrencies as investment products will be implemented by 2025.
These steps reflect the government’s effort to enhance the regulatory landscape and investor safeguards while addressing emerging challenges in the rapidly evolving cryptocurrency sector.
