37% of payments leaders cite regulatory clarity as top challenge in MiCA crypto-asset compliance

Clear Junction, a global leader in cross-border payments for regulated financial institutions, has revealed a significant gap in the preparedness of payment industry leaders to navigate the complexities of the Markets in Crypto-Assets Regulation (MiCA) regulation, which is now in effect across the EU.

MiCA, which entered into force in June 2023, introduces a comprehensive regulatory framework for European crypto-assets. As the EU’s most extensive effort to regulate the crypto market, MiCA seeks to address longstanding issues such as regulatory fragmentation, consumer protection, and market stability. 

Clear Junction’s findings stem from a recent poll of 150 senior payment industry executives conducted during its ‘MiCA Masterclass’ webinar hosted in collaboration with financial services compliance consultancy fscom. The webinar aimed to provide crucial guidance to firms subject to MiCA, including crypto-asset service providers (CASPs), virtual asset service providers (VASPs), and issuers of asset-referenced tokens (ARTs) and electronic money tokens (EMTs).

Attendees were asked the most significant challenges they were or are still encountering when looking to comply with MiCA. Key findings from the webinar poll:

• 37% of payment leaders find understanding which regulatory requirements are relevant to them their biggest challenge.
• 20% struggle with understanding whether they need to be authorised or not.
• 24% find the authorisation process difficult.
• 20% report difficulty in understanding compliance requirements during the Grandfathering period.

CEO and founder of Clear Junction, Dima Kats, commented: “Regulatory clarity is more than just a hurdle; it’s an opportunity for businesses to establish themselves as trusted players in the evolving financial landscape. With 37% of payment leaders identifying the challenge of understanding which regulatory requirements apply to them under MiCA, it’s clear that many are still navigating the complexities of this landmark regulation.

“However, as MiCA aims to address fragmentation and enhance consumer protection, it also allows businesses to align with a future where crypto-assets are integrated seamlessly into the global financial system. Embracing these regulatory changes will not only help businesses comply. Still, it will also position them at the forefront of a new era in finance – one where trust, stability, and security are key drivers of success.”

Webinar attendees were also given a comprehensive overview of MiCA and its implications for organisations engaging with the crypto-asset space. Key takeaways from the masterclass session include:

• A unified regulatory framework is a double-edged sword: MiCA’s inflexible nature means that member states cannot alter or choose their regulatory measures. While this approach eliminates the inconsistencies of national regulations, it removes the flexibility companies once had to adapt to local nuances. This creates both clarity and limitations for businesses operating across the EU.
• Stringent requirements on stablecoins: MiCA places significant emphasis on asset-reference tokens (ARTs) and Electronic Money Tokens (EMTs), commonly known as stablecoins. The regulation introduces strict requirements for stablecoin issuers, including robust reserve backing, transparency, and governance. Payments companies relying on stablecoins must ensure these assets meet the new standards, impacting everything from operational processes to customer offerings.
• Challenges for non-EU companies: MiCA presents a significant challenge for non-EU companies. Starting 30 December 2024, crypto-asset service providers outside the EU must secure MiCA authorisation to continue operating in the EU market. This transition period, known as the Grandfathering period, runs until 1 July 2026. Non-EU businesses will need an EU presence to continue and expand their operations in the region. While options like reverse solicitation or national exemptions exist, they offer limited solutions.

As Dima stated: “Crypto is no longer a speculative frontier; it is now a legitimate and integral part of the financial landscape, and MiCA lays down the rules for that legitimacy. With more deadlines fast approaching, businesses must understand the regulations and their obligations.”

Clear Junction, with its expertise in cross-border payments, crypto integrations, and regulatory compliance, is uniquely positioned to assist businesses in navigating MiCA’s complexities. To watch a replay of the webinar, go to MiCA Masterclass with Clear Junction.

This session is the second instalment in Clear Junction’s webinar series addressing compliance challenges within the financial services sector. It highlights how increasing regulatory scrutiny is reshaping the operational, budgetary, and strategic considerations for payment providers across Europe. Clear Junction will share registration links for future sessions on its LinkedIn channel for interested parties.

To learn more about how Clear Junction can support banks and financial institutions with specialised payment services and comprehensive end-to-end solutions, go to: https://clearjunction.com/

About Clear Junction

Clear Junction is a global payments solutions provider that was established in 2016. A veteran team of financial professionals founded the company with many years of experience in cross-border payments and banking. Over the years, we have worked tirelessly to build and develop our proprietary technology to facilitate an end-to-end regulated payments solution. We are licensed and regulated by the Financial Conduct Authority and have offices in multiple locations across the UK and Europe.