The Madrid MiCAR Roundtable, held on October 10, 2024, at Palacio de Cibeles, brought together regulatory and industry experts to explore crypto compliance under MiCAR. Discussions focused on integrating the Transfer of Funds Regulation (TFR), managing systemic risks of E-Money Tokens (EMTs), and addressing privacy challenges.
Integrating TFR with MiCAR
Tommaso Astazi discussed the complexities of applying the “Travel Rule” to crypto transactions, particularly with self-hosted wallets (SHWs). While transactions below €1000 only require basic data collection, those exceeding this threshold face verification challenges. Participants highlighted the need for a balanced, risk-based approach that accommodates technological advancements like decentralized identities and zero-knowledge proofs. Stricter rules than those in traditional finance (TradFi) were deemed counterproductive, potentially driving users toward unregulated markets.
Systemic Risks of E-Money Tokens (EMTs)
Albi Rodriguez Jaramillo emphasized the systemic importance of EMTs, particularly stablecoins, in the crypto market. MiCAR requires stringent compliance for EMT issuers, including capital and liquidity buffers, regular stress testing, and reporting to regulators. Challenges include dual supervision by national and EU authorities, and fragmented reporting standards. Participants advocated for adopting Supervisory Technology (SupTech) solutions like BIS Pyxtrial to streamline oversight and ensure regulatory consistency across jurisdictions.
Privacy and Data Protection Challenges
Max Bernt addressed the integration of on- and off-chain data for compliance under frameworks like DAC8, AMLD6, and MiCAR. Privacy risks include potential data leaks, regulatory non-compliance, and cross-border data-sharing challenges. Proposed solutions included mandating secure reporting tools, separating on- and off-chain data, and limiting data collection to essential information. Anonymization techniques were recommended to balance transparency with user privacy.
Conclusion
The Madrid MiCAR Roundtable emphasized the importance of harmonized regulations that balance innovation and compliance. Risk-based approaches, technological solutions like SupTech, and clear privacy standards are crucial to addressing the complexities of crypto regulation. By fostering collaboration among stakeholders, MiCAR can ensure robust oversight while supporting growth and transparency in the crypto industry.
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