In the letter addressed to the Economic and Financial Affairs Council (ECOFIN), ESMA Chair, Verena Ross, calls on Member States to designate without delay the competent authorities responsible for carrying out the functions and duties provided for under MiCA, and to consider limiting the optional grand-fathering periodto 12-months should they choose to offer it in their jurisdictions.

ESMA has also published a statement addressed to entities providing crypto-asset services and the national competent authorities that will be responsible for their supervision, which lists expectations for each from now until the end of the MiCA transitional period. The competent authorities are encouraged to dedicate resources and align their supervisory practices with those of their counterparts across the EU to begin effective supervision from day one.

Market participants are encouraged to begin planning towards a smooth transition and ensure their clients are aware of the regulatory status of their ‘grand-fathered’ crypto-asset offerings. The statement also reminds consumers of the risks associated with holding or investing in crypto-assets until and even after MiCA enters into application.

Background

The grand-fathering period refers to the optional transitional measure under MiCA that grants Member States the ability to allow entities already providing crypto-asset services in their jurisdiction to continue providing those services from 30 December 2024 until as late as 1 July 2026 (depending on the duration chosen by Member States).

More information on the timeline for MiCA implementing measures and the transitional period can be found here.