EU Member-State Envoys Endorsed MiCA’s Final Compromise

The Council of the European Union’s Permanent Representatives Committee endorsed the final compromise text of the Markets in Crypto-Assets regulation on October 5, 2022, clearing a critical institutional hurdle for the European Union’s first broad crypto rulebook.

Council information note 13198/22 records that the committee backed the text “with a view to agreement” and that the Council presidency sent it to the chair of the European Parliament’s Committee on Economic and Monetary Affairs. The accompanying letter indicated that if Parliament adopted its first-reading position in the attached form, the Council would approve that position.

That was consequential, but it was not final enactment. MiCA remained proposed legislation on October 5. Parliament still had to act, and the Council still had to complete formal adoption. No exchange, issuer or wallet provider became licensed under MiCA because of the committee endorsement.

A single-market framework moved closer

The compromise sought to replace a fragmented national landscape with common EU rules for crypto-assets not already governed by existing financial-services law. It covered issuers of asset-referenced tokens and e-money tokens as well as crypto-asset service providers performing activities such as custody, exchange, order execution and operation of trading platforms.

For service providers, the text established an authorization model tied to an EU registered office and effective management in the Union. Once authorized, a provider could serve customers across the bloc through establishment or cross-border services without maintaining a physical presence in every host member state. The institutional significance was the combination of one supervisory baseline with access to the wider single market.

The draft also required prudential safeguards. A provider would have to maintain the higher of its applicable permanent minimum capital requirement or one quarter of the preceding year’s fixed overheads. Depending on the service class, the attached schedule set permanent minimum capital at €50,000, €125,000 or €150,000. Those figures were legislative requirements in the compromise, not measurements of firms’ capital on October 5.

Stablecoins and consumer duties

The Council’s June 30, 2022 account of the political agreement emphasized liquid reserves and redemption rights for so-called stablecoins. The October 5 text gave asset-referenced-token holders permanent redemption rights and required reserves to be segregated and managed to cover reference-asset and liquidity risks. It also set rules for e-money tokens and assigned enhanced supervisory responsibilities to the European Banking Authority for tokens classified as significant.

For other covered crypto-asset offerings, the framework centered on disclosures through crypto-asset white papers. Retail buyers purchasing directly from an offeror, or through a provider placing tokens for that offeror, would generally receive a 14-calendar-day withdrawal period without fees or a requirement to give reasons. The text also addressed market abuse, conflicts of interest, custody responsibilities and disclosure of environmental and climate impacts associated with consensus mechanisms.

Non-fungible tokens were not categorically brought inside the regime. The contemporaneous Council explanation said unique NFTs would generally remain outside MiCA unless they fell within an existing crypto-asset category, leaving classification dependent on substance rather than branding.

What the endorsement did—and did not—settle

The defensible October 5 conclusion was procedural and structural. Member-state representatives had accepted the negotiated package and supplied Parliament with a route to enact matching language. That sharply reduced political uncertainty around the core framework, but it did not resolve every implementation question or make the rules immediately applicable.

The attached text contemplated application 18 months after entry into force, with its asset-referenced-token and e-money-token titles applying after 12 months. Because entry into force itself depended on later formal adoption and publication, neither application date was fixed on October 5. Firms could see the likely regulatory architecture; they could not yet claim authorization under it.

Later context

An official European Parliament legislative history later recorded approval by the Economic and Monetary Affairs Committee on October 10, 2022. That later step confirms the October 5 endorsement’s place in the process, but it is not used to imply that MiCA was law on the event date.