MiCA Framework

MiCA Framework

Regulation (EU) 2023/1114, commonly known as MiCA (Markets in Crypto-Assets), is the European Union's comprehensive regulatory framework for digital assets and crypto-asset service providers (CASPs). It was published in the Official Journal of the European Union on June 9, 2023, with Title III and IV (asset-referenced tokens and e-money tokens) applying from June 30, 2024, and the remaining provisions applying from December 30, 2024.

Scope and Definitions

MiCA regulates three categories of crypto-assets:

• Asset-Referenced Tokens (ARTs) - Tokens that reference multiple assets, including fiat currencies, commodities, or other crypto-assets (Title III)
• E-Money Tokens (EMTs) - Tokens that reference a single fiat currency and function as electronic money (Title IV)
• Other Crypto-Assets - All crypto-assets not classified as ARTs or EMTs, including utility tokens (Title II)

MiCA also establishes authorization requirements for Crypto-Asset Service Providers (CASPs) under Title V, covering ten categories of services defined in Article 3(1)(16).

CASP Authorization Tiers

MiCA establishes a three-tier capital structure for CASPs, with minimum own funds requirements based on the scope of services offered. The highest applicable class determines the capital requirement.

Why fXYZ Triggers Class 3

The fXYZ Network operates an order routing system that matches counterparties for stablecoin trading. Under MiCA Article 3(1)(18), a "trading platform for crypto-assets" is defined as:

a crypto-asset service that manages a multilateral system, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in crypto-assets, in the system and in accordance with its rules, in a way that results in a contract.

The order routing model, where the platform matches buy and sell orders from multiple participants according to pre-defined rules, meets this definition. Accordingly, fXYZ requires Class 3 CASP authorization with a minimum own funds requirement of EUR 150,000.

Stablecoin Pair Matching Under MiCA

A key regulatory distinction applies to the platform's core service of matching stablecoin pairs such as USDC and EURC. Under MiCA, exchanging one crypto-asset for another crypto-asset constitutes an "exchange of crypto-assets for other crypto-assets" as defined in Article 3(1)(16)(e). This service falls within MiCA's scope regardless of the underlying currencies referenced by the stablecoins.

This is distinct from spot foreign exchange (FX) trading, where physical currency is delivered on a T+2 settlement basis. Spot FX is explicitly excluded from the scope of MiFID II (Directive 2014/65/EU) as it is not considered a financial instrument. The practical consequence: stablecoin matching can operate under a MiCA CASP authorization alone, without requiring a MiFID II investment firm license.

Article 76: Trading Platform Obligations

CASPs operating a trading platform must satisfy specific requirements under Article 76 of MiCA. These obligations are designed to ensure fair, transparent, and orderly markets.

No Proprietary Trading

A CASP operating a trading platform shall not deal on own account on the platform it operates, including through entities within the same group. This is a strict separation requirement.

Pre-Trade Transparency

The platform must make public current bid and offer prices and the depth of trading interest at those prices. This information must be available on a continuous basis during normal trading hours, at reasonable commercial terms, and on a non-discriminatory basis.

Post-Trade Transparency

The price, volume, and time of transactions executed on the platform must be made public. This information must be made available free of charge no later than 15 minutes after execution. Real-time publication may be offered on a commercial basis.

Settlement

Transactions executed on the platform must be settled no later than 24 hours after execution, or by the end of the business day on which the transaction was executed, whichever is later.

Market Integrity

The platform operator must establish and maintain effective systems and procedures for:

• Detecting and reporting market abuse, including insider dealing and market manipulation
• Monitoring transactions for suspicious patterns
• Cooperating with competent authorities in market abuse investigations

Horizontal Regulatory Obligations

MiCA does not exist in isolation. CASPs must also comply with several horizontal EU regulations that apply to digital asset services.

Key Technical Standards

The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) are developing Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) that further specify MiCA requirements. Key areas include:

• RTS on complaints handling (Article 71) - Procedures for receiving and processing client complaints
• RTS on conflicts of interest (Article 72) - Policies for identifying, preventing, and disclosing conflicts
• RTS on classification of crypto-assets - Criteria for determining whether a token is an ART, EMT, or other crypto-asset
• ITS on CASP reporting - Templates and formats for prudential and statistical reporting
• RTS on pre- and post-trade transparency (Article 76) - Specific data fields, formats, and timing requirements for trading platform operators

These standards are published progressively and become binding following their adoption as delegated regulations. CASPs must monitor the ESMA and EBA registers for new publications and implementation deadlines.

References

• Regulation (EU) 2023/1114 — Full Text (EUR-Lex) — The complete MiCA regulation as published in the Official Journal of the European Union
• MiCA Summary — EUR-Lex — Plain-language summary of MiCA's objectives, scope, and key provisions
• ESMA Supervisory Briefing on CASP Authorisation (Jan 2025, PDF) — Guidance for national competent authorities on processing CASP applications
• Regulation (EU) 2022/2554 — DORA (EUR-Lex) — Digital Operational Resilience Act covering ICT risk management for financial entities
• Regulation (EU) 2023/1113 — Transfer of Funds Recast (EUR-Lex) — Recast transfer of funds regulation extending travel rule obligations to crypto-asset transfers
• MiCA Tracker — Latham & Watkins — Consolidated tracker of MiCA legislative texts, delegated acts, and technical standards
• MiCA Status Update — Hogan Lovells (Feb 2025) — Practitioner analysis of MiCA implementation status and outstanding regulatory developments
• AMF France — MiCA Overview — French financial regulator's overview of MiCA and its implications for market participants