Challenges of the MiCA Regulation
Since its implementation less than a year ago, the European Union’s Markets in Crypto-Assets Regulation (MiCA) has already encountered significant challenges. Regulatory authorities are actively seeking solutions to mitigate these emerging issues. One of the primary concerns involves the swift issuance of licenses by various member states, which has raised alarms among regulators.
Centralized Regulatory Framework
In an effort to establish more consistent oversight of the cryptocurrency sector, the European Securities and Markets Authority (ESMA) intends to introduce a more centralized and rigorous regulatory framework, although the specifics of this initiative have yet to be disclosed.
Unified Order Book Discussion
A noteworthy consideration under discussion is the prospect of creating a unified order book that would facilitate liquidity sharing with exchanges situated beyond EU borders. While regulators fear that such arrangements could complicate accountability regarding trade execution, risk management, and transparency, market participants advocate for this approach, arguing that consolidating buy and sell orders across a more extensive network could enhance liquidity and improve pricing accuracy.
ESMA’s Position on Order Books
Despite the ongoing discussions, ESMA has not issued a formal statement on the shared order book concept. Nonetheless, it responded to inquiries via email, restating its position from a recent Q&A session: cryptocurrency trading firms are prohibited from integrating their order books with trading platforms that lie outside the scope of EU regulations established by MiCA. This guideline is part of ESMA’s commitment to ensuring fairness in regulatory applications within the EU framework.
