CySEC Begins Accepting Applications for License to Provide Cryptocurrency Services under MiCAR
The Cyprus Securities and Exchange Commission has announced that it will begin accepting applications for crypto-asset services under the Markets in Crypto-Assets Regulation (MiCAR) legislation of the European Union.
About the MiCAR Notification
The CySEC has opened its doors to those who seek to provide crypto-asset services through a license from the CySEC. The relevant legislation, which is the MiCAR, is slated to come into force by 30th December. It will be for all members of the European Economic Area (EEA).
There is no guarantee that the license application will be approved before the legislation comes into force. The regulator has also stated that it is likely to prioritize applications from entities that are locally regulated.
The regulator has also announced that currently there are no timelines for approval stipulated within the rules of the MiCAR. CySEC will reserve the right to approve applications within a timeframe that it deems suitable. It will be within the bounds of EEA regulations.
For existing entities to continue providing crypto-asset services, they should have an approved license by 1st July 2026. Or they will have to cease their operations.
The new MiCA regulations have been implemented to replace all national-level regulations on cryptocurrencies. The MiCA regulations will allow cryptocurrency service providers to passport their license across all regions within the EEA. That can unlock a significant market through a single license.
Impact of MiCAR on Brokers
Unified Licensing Regime
Before, any crypto-asset service provider would need to apply for different licenses to operate in various countries within the European Union. However, thanks to the MiCAR, a single license allows crypto-asset service providers to access the entire EU market. This can lower regulatory hurdles for forex brokers who do not have to comply with several different regulatory environments.
New Compliance Requirments
The new MiCAR is a highly comprehensive and forward-looking legislation. The statute has several moving parts and the exact implications of the rules and regulations within the legislative framework remain to be seen. However, it is clear that forex brokers will need to consult with their corporate lawyers in order to fully grasp the regulatory implications. Several new rules have been put in place such as all cryptocurrency users needing to be identified.
About CySEC
The CySEC, or the Cyprus Securities and Exchange Commission, is the financial regulator of Cyprus which is part of the European Union. The CySEC is deemed to be a highly influential and respected financial regulator in the global forex and CFD trading industry.
Summing Up
Overall, the announcement by the CySEC opens a new arena for crypto-asset service providers looking to enter or continue operating in the European Union market. This announcement does not just affect Cypus but the EU as a whole. The complete implications of the new law remain to be seen as it comes into force on 30th December 2024.
