MiCA and the New Order of Crypto Markets: Balance between Innovation and Protection
MiCA and the New Order of Crypto Markets: Balance between Innovation and Protection

Author(s): Kremena Choutilova-Yochkolovska, Natalia Petrova
Subject(s): Politics / Political Sciences, Politics, Economy, Governance, Economic policy, EU-Approach / EU-Accession / EU-Development, Financial Markets, ICT Information and Communications Technologies
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Crypto-assets; MiCA Regulation; Crypto-asset Service Providers (CASPs); Consumer Protection; Financial Stability; Market Risk
Summary/Abstract: Over the past decade, digital assets and crypto markets have gained increasing importance, developing largely in an environment of regulatory freedom. This financial phenomenon has been accompanied by the emergence of new risks, both for consumers and for the stability of the financial system as a whole. In this context, the European Union has moved towards the establishment of a unified regulatory framework aimed at ensuring legal certainty, predictability, and transparency for participants in the crypto ecosystem and all relevant stakeholders. The present report focuses on the Regulation on Markets in Crypto-Assets (MiCA), which represents a core element of the emerging regulatory order governing crypto markets. The analysis traces the underlying rationale of MiCA, examining the need to distinguish crypto assets into separate categories based on their functionality and risk profile. Particular attention is also devoted to the role of crypto-asset service providers, identified as a central component of the normative framework governing crypto markets. The regulatory philosophy of MiCA is grounded in a preventive approach and in the understanding that an appropriate balance must be achieved between fostering innovation and ensuring effective consumer protection.

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