On 19 April 2024, ALFI responds to ESMA’s consultation on the draft common guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments under the Market in Crypto Assets (MiCA).

The proposed guidelines aim at providing guidance on the qualification of crypto-assets as financial instruments that national competent authorities and market participants should consider, so as to foster convergence in the local transposition across the EU, regarding the classification of crypto-assets as financial instruments.

In our response to this consultation, ALFI highlight the following concerns:

1. Flexibility: As a general consideration, ALFI is in favour of the flexibility offered with regards to the criteria for qualification of crypto assets as financial instruments;
2. Principle-based approach: We would emphasize the opinion that a principle-based approach is preferable, rather than a rule-based approach, considering:
   1. Individual instrument definitions with regards to crypto-assets still remain to be fully defined
   2. With regards to qualification and eligibility, various pieces of regulation are interconnected (MiFID in particular) and such flexibility allows to ensuring consistency across the board.
3. Streamlined interpretation across the EU: ALFI is strongly in favour of a common, streamlined interpretation of the guidelines across Europe, as this is of utmost relevance for the Luxembourg domiciled funds, which are largely distributed throughout the Union. Any vagueness or divergence in the interpretations in the local jurisdictions should be avoided. In any instances, a common ground implementation throughout the Union should be fostered, so as to avoid exposing the industry and its cross-border players to additional costs and legal uncertainty.

View the ALFI response.