Understanding MiCA Token Classification for Top 50 Crypto Assets

The Markets in Crypto-Assets (MiCA) regulation introduces a structured approach to token classification within the European Union. Its framework categorizes digital assets based on their design, function, and underlying value reference, providing much-needed regulatory clarity.

This article explores MiCA’s taxonomy and applies it to the top 50 cryptocurrencies by market capitalization, helping investors, developers, and enthusiasts navigate the new regulatory landscape.

What Is a Crypto-Asset Under MiCA?

MiCA defines a crypto-asset as a digital representation of value or rights that can be transferred and stored electronically using distributed ledger technology (DLT) or similar technology. This definition consists of three key components:

• Digital representation of value or rights
• Transferability capability
• Electronic storage via DLT

The transferability requirement is particularly important. It excludes tokens with hardcoded non-transferability features, such as soulbound tokens, from MiCA's scope.

Crypto-Assets Excluded from MiCA Regulation

MiCA Article 2 specifies several exclusions from the regulation's scope. Two primary categories are particularly relevant for token classification.

Unique and Non-Fungible Crypto-Assets (UNFCA)

While commonly called NFTs, MiCA applies stricter criteria. To qualify as UNFCA and be excluded from MiCA, a token must:

• Possess unique properties that contribute to its value
• Derive value from unique utility granted to each holder
• Meet both conditions simultaneously

This dual requirement means many projects marketed as NFTs might not automatically qualify for exclusion.

Financial Instruments and Traditional Finance Products

This category presents significant complexity due to varying interpretations across EU member states. Excluded instruments include:

• Financial instruments under MiFID II
• Deposits and structured deposits
• Funds and securitization positions

The challenge arises because MiFID II implementation varies across EU jurisdictions, meaning some assets may be considered financial instruments in some countries but not others.

Crypto-Assets Within MiCA's Scope

Tokens that don't qualify for exclusion fall under MiCA's purview, divided into three distinct categories:

• E-Money Tokens (EMTs) - Title IV
• Asset-Referenced Tokens (ARTs) - Title III
• Other Crypto-Assets (OCAs) - Title II

Importantly, MiCA primarily regulates entities offering crypto-assets to the public or seeking trading admission, not the assets themselves or issuers conducting private distributions.

E-Money Tokens (EMTs)

EMTs are crypto-assets that maintain stable value by referencing one official currency. Key characteristics include:

• Reference to a single fiat currency
• Stable value maintenance design
• Irrelevance of collateralization method to classification

A common misconception suggests that collateral type affects EMT classification. However, the legal definition focuses solely on the design purpose of maintaining stability relative to one official currency.

For example, EURC remains an EMT regardless of reserve status because it's designed to reference the Euro's value. Reserve requirements are obligations for issuers, not classification factors.

Asset-Referenced Tokens (ARTs)

ARTs comprise crypto-assets that maintain stable value by referencing other values, rights, or combinations thereof, including:

• Multiple official currencies
• Other crypto-assets
• Commodities or indices
• Combinations of various assets

Notable ART examples include liquid staking tokens, wrapped tokens, and interest-bearing stablecoins. These assets derive value from reference assets rather than functioning as native blockchain tokens.

Market price fluctuations of reference assets don't affect ART classification. What matters is the design intention to maintain a stable relationship with the referenced asset or value.

Other Crypto-Assets (OCAs)

OCAs serve as the catch-all category for crypto-assets that don't qualify as EMTs or ARTs. This broad category includes:

• Native layer-1 tokens (e.g., BTC, ETH)
• Governance tokens
• Meme tokens
• Utility tokens
• Various other digital assets not fitting EMT or ART criteria

OCAs represent the largest category by number of tokens and include most of the cryptocurrency market's well-known assets.

Practical Classification Guide for Major Tokens

When classifying any token under MiCA, follow this systematic approach:

1. Verify transferability (non-transferable tokens are excluded)
2. Check UNFCA status (if qualified, excluded)
3. Assess financial instrument status (if qualified, excluded but regulated elsewhere)
4. If termed "stablecoin," likely EMT (single currency) or ART (multiple references)
5. Liquid staking tokens typically qualify as ARTs
6. Interest-bearing tokens might be ARTs or financial instruments
7. All remaining tokens likely qualify as OCAs

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Frequently Asked Questions

What makes a token excluded from MiCA regulation?
Tokens are excluded if they're non-transferable, qualify as UNFCAs (with both unique properties and utility), or constitute financial instruments under national implementations of EU laws. Each exclusion category has specific requirements that must be met precisely.

How do wrapped tokens classify under MiCA?
Most wrapped tokens qualify as Asset-Referenced Tokens because they reference the value of other crypto-assets. For example, WBTC references Bitcoin's value, making it an ART rather than an OCA, despite its functional similarities to native assets.

Are meme coins regulated under MiCA?
Yes, most meme coins qualify as Other Crypto-Assets since they typically don't reference specific assets or currencies for value stability. They fall under Title II of MiCA unless they meet exclusion criteria, which most don't.

What happens to stablecoins that don't maintain perfect pegs?
Classification depends on design intent, not market performance. A token designed to reference a currency remains an EMT even if its market price deviates temporarily. The regulatory obligations focus on issuer requirements rather than perfect price stability.

How does MiCA affect decentralized protocols?
MiCA primarily regulates entities offering tokens to the public or seeking trading admission. Truly decentralized protocols without identifiable issuers might fall outside direct regulation, but this area remains subject to interpretation and future guidance.

Do classification rules apply across all EU countries?
Yes, MiCA establishes uniform classification criteria across all EU member states. However, financial instrument determinations may still vary slightly due to different national implementations of MiFID II and other financial regulations.

Top 50 Tokens Under MiCA Classification

Based on the framework outlined above, here's how the top 50 cryptocurrencies classify under MiCA:

The complete classification reveals that most major tokens fall under the Other Crypto-Asset category, with stablecoins dividing between EMT and ART classifications based on their reference assets.

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Understanding MiCA classification is essential for compliance and operational planning within the European crypto market. The regulation provides clear frameworks but requires careful analysis of each asset's characteristics and intended functionality.