MiCA: Department of Finance decides on national discretions, reducing the transitional period to 12 months
On 14 December 2023, the Department of Finance published a feedback statement on its consultation on the transposition of the national discretions available under the Markets in Crypto-Assets Regulation (MiCA).
The Department of Finance has advised that the feedback statement should be read in conjunction with the public consultation document.
The following decisions on the national discretions were outlined in the feedback statement:
- Ireland will exercise the discretion under Article 143(3) of MiCA and reduce the transitional period to 12 months for crypto-asset service providers (CASPs) that are providing services in Ireland in accordance with national law prior to 30 December 2024, in line with the recent guidance issued by ESMA. The transitional period will run until the end of December 2025 instead of 1 July 2026.
- Ireland will not exercise the discretion under Article 88(3) of MiCA, which provides that where there has been a delay in the public disclosure of inside information, an explanation need only be provided when specifically requested by the national competent authority.
- Ireland will not exercise the discretion under Article 143(6) of MiCA, which provides for a simplified procedure in respect of the authorisation of existing virtual asset service providers (VASPs) as CASPs. The decision acknowledges that Ireland’s existing VASP registration process under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 is not comparable to the authorisation process for CASPs under MiCA.
- Ireland will not exercise the discretion under Article 111(1) of MiCA, which permits Member States to decide not to lay down rules for administrative penalties where the associated infringements are subject to criminal penalties under national law. In addition, Article 111(6) of MiCA permits Member States to supplement the enforcement powers mandated under MiCA by allowing Member States to impose higher levels of penalties than those provided for under MiCA. In this regard, where the "minimum maximum" penalty amounts under MiCA are lower than those provided for under the Central Bank of Ireland’s Administrative Sanctions Procedure (ASP), the penalty amounts should be increased to match those provided for under the ASP. Furthermore, all sanctions under the ASP should be available to the Central Bank of Ireland in respect of sanctioning breaches of MiCA, and not just the minimum list of penalties available under Article 111 of MiCA. These decisions will be given effect by, for example, amendments to the Central Bank Act 1942 and the publication of domestic Regulations transposing MiCA.
The Department of Finance confirmed that the Minister for Finance will designate the Central Bank of Ireland as the national competent authority, ensuring that the regulator will have the adequate powers, independence and resources to fulfil the obligations required of a national competent authority under MiCA.
MiCA will apply from 30 December 2024, with the exception of Titles III and IV of the Regulation (which address the frameworks for asset-referenced tokens and e-money tokens) which will apply from 30 June 2024.
Key contacts
Patrick Brandt,Partner, Kevin Allen, Partner, Louise Hogan, Associate, Sarah Lee, Senior Knowledge Lawyer or any member of ALG's Financial Regulation Advisory team.
Published: 26 January 2024