Good day everyone,
I hope you are all well and having excellent day, welcome to CryptoGod-1’s blog on all things crypto. Below I will be looking at the recent consultation paper on the Markets in Crypto Asset (MiCA) regulations issued by the European Securities and Markets Authority.
European Securities and Markets Authority
The financial markets regulator for the European Union, European Securities and Markets Authority (ESMA), has published a second consultation paper on the Markets in Crypto Asset (MiCA) regulations. Released on the 5th of October 2023, the document calls for stakeholders' participation in various sectors of the crypto market. This is in anticipation of the implementation of MiCA in 2024, and the regulator is hope for a hitch-free change of direction with the regulations.
All suggestions by market participants sent before the 14th of December 2023 will be considered by the body, and a final draft including recommendations will be released in the first quarter of 2023. There are five key areas highlighted within the paper which would would benefit from the input of blockchain firms, asset issuers, crypto executives, etc.
“(i) sustainability indicators and adverse impacts on climate;
(ii) continuity and regularity in the performance of CASP services;
(iii) offering pre-and post-trade data to the public;
(iv) content and format of order book records and record-keeping by CASPs;
(v) machine readability of white papers and the register of white papers; and (vi) the technical means for appropriate public disclosure of inside information.”
Regulators have been focused on blockchain sustainability as much as climate activists in recent years, with experts considering solutions to reduce any environmental impact caused by blockchain and the crypto industry. The authority is looking for quantitative metrics from stakeholders on the use of fossil fuels, energy intensity, the type of equipment that forms nodes, and the sector's total waste products.
Within the draft it is clear that ESMA are planning to develop a framework on the sustainability of consensus mechanisms, along with their impact on the climate. The body has found that the sustainability of consensus mechanisms hinged on certain factors.
“1) the energy consumption of each DLT network node;
2) their location; and
3) the devices that each DLT network node uses both to take part in the DLT network, such as application-specific integrated circuits (ASICs) and to hold a replica of records of all transactions on a distributed ledger, including servers and equipment used to maintain their integrity.”
ESMA also plans to ensure the continuity and regulation in the operations of crypto firms, noting the body will use the business continuity requirements imposed on firms by MiCA as a benchmark. Firms will be required to establish a Business Continuity Policy (BCP) including an ICT system, preservation of online trade data, and timely recovery of digital asset services. According to Article 76 (16)(a) of the MiCA regulations, all transparency in pre and post-trade data mush be available to the public.
“ESMA shall develop draft regulatory technical standards to further specify:
(a) the manner in which transparency data, including the level of disaggregation of the data to be made available to the public as referred to in paragraphs 1, 9, and 10, is to be presented”
Pre-trade activities require all crypto service providers to display bid and ask prices publicly, interests, and related information throughout the process.
Post-trade requirements require firms to preserve the time, price, and volumes of transactions on their platforms and should always display in real-time.
Have a great day.
Peace. CryptoGod-1.
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