April 28, 2023

The European Parliament has recently voted in favour of a new crypto licensing regime, namely the Markets in Crypto-Assets Regulation (MiCAR): this is the first, harmonised EU framework governing crypto-assets that will be shortly transposed into a directive, thus being directly applicable across all the Member States including Malta.

The MiCAR makes reference to the authorization and supervision of issuers of certain types of crypto-assets, as well as of crypto-asset service providers within the EU, allowing the European crypto-asset industry to have regulatory clarity that does not exist in other countries. The main purpose of the regulation will be to protect consumers and to safeguard both the financial stability and market integrity.

The MiCAR's introduction attests Malta's foresight to support financial innovation and its vision about cryptocurrency and blockchain: the rules adopted by the country more than 5 years ago with the Virtual Financial Assets Act have been now introduced across all the EU. The Malta Financial Services Authority (MFSA) has already commenced discussions with stakeholders to ensure a seamless transition to the MiCAR once the VFA Act will be repealed.

For this reason, Malta confirms its attractiveness for establishing crypto-asset operations. The jurisdiction is already familiar with a designated licensing regime for cryptocurrencies: the MFSA’s experience with licence holders, including its supervisory function, should give Malta an edge over other Member States.

The new regulation will surely have a significant impact on Malta's fund industry, strengthening the already existing appeal of the island as fund domicile: the European asset managers are in fact able to structure an investment scheme investing directly in digital assets opting for a Professional Investor Fund (PIF) or a Notified Alternative Investment Fund (NAIF), the two exclusive regimes of the Maltese jurisdiction for which CC Fund Services can offer bespoke solutions for setting up and administration.