According to a recent press release from the Ministry of Economy, Spain will bring forward the application of the MiCA European Regulation (Markets in Crypto Assets) on the regulation of the crypto assets market to 31st December 2025, instead of applying it from 31 July 2026.
This regulation aims to comprehensively regulate both the issuance of cryptocurrencies and their commercial trading based on their consideration as products similar to investment products. Thus, the European Union is ahead of the United States, Great Britain, and other countries with large capital markets in regulating this new sector, although the MiCA Regulation is highly complex and gives the advantage to banks and large companies, which will be the only ones able to comply with its requirements.
The Spanish government press release is intentionally confusing because the MiCA Regulation already entered into force on 29th June, twenty days after its publication in the Official Journal of the European Union. The statement refers to the transitional provisions contained in Article 143 of the Regulation.
This “confusion” of the ministerial communique reminds me of my years as a law student when I was taught that one must start reading laws from the end to the beginning, starting with the grand-fathering clause so as to know when and how new legislation starts to apply.
In the case of Spain, the transitional provisions of Article 143 are very important, since our country has regulated the providers of cryptocurrency exchange and custodian services, only from the standpoint of compliance with anti-money laundering regulations and requiring their registration in a newly created register at the Bank of Spain, in addition to a CNMV circular on restrictions on the advertising of these products.
The aforementioned transitional provision allows European Member countries to have their own legislation on cryptocurrencies to keep it in force until 31st December 2027, giving them the option of withdrawing earlier. Therefore, the Spanish government press release shows that Spain has sent the European regulator (ESMA) a notification with the option of repealing, or being considered non-applicable, the Spanish legislation on 31st December 2025, two years before the maximum deadline of 2027.
With the adoption of the MiCA Regulation, Spain is no longer competent to make rules on these matters whose regulation has been transferred to the realm of the European Union. In plain English, cryptocurrency exchange and custody service providers will see their licenses expire in December 2025 and will have to apply for new MiCA licences to continue operating in Spain. Given that the Bank of Spain has registered more than 70 companies, this is not a trivial problem.
From this point of view, there is no justification for the triumphalist language contained in the Ministry of Economy's press release, as will undoubtedly create more difficulties than solutions. The key to what has happened comes from a previous letter addressed by ESMA to the Minister, Mrs. Nadia Calviño in the latter's capacity as President of ECOFIN at the time.
In its letter, ESMA mainly addresses two concerns: the first concern is "Forum-shopping", or competition between European Member countries to dictate liberal and flexible regulations to attract companies and investments in cryptocurrencies, and the second concern is the withdrawal as soon as possible of national legislation and its total replacement by the MiCA regulation.
The Spanish Government press release responds to this second demand and demonstrates the unnecessary submission of our politicians to the dictates of Brussels. Spanish legislation could perfectly well continue in force and coexist with the Regulation, since it only addresses compliance with money laundering rules, an issue not dealt with by the MiCA Regulation, or the regulation on advertising, which is very well dealt with by the CNMV circular, and barely touched by the European Regulation.
We Spanish citizens simply give up to our rules and to the control and ultimate decision of our authorities, which have a staff of trained officials and experts in many areas. Moreover, the MiCA Regulation was drafted in Europe with banks and large companies in mind, whereas in Spain, and in other countries around us, entrepreneurs and startups are very active.
The future business consolidation into large companies and banks will lead to the disappearance of many small Spanish companies. It should not be forgotten that the trading of cryptocurrencies is often linked to online payment platforms and is evidence of the contemporary phenomenon of the growth of decentralised finance from which Spain is being left behind. And then, we complain that in our economy we find little innovation and entrepreneurship, and a lot of low productivity, and therefore, low wages.