Home Knowledge MiCA National Discretions: Department of Finance publishes Feedback Statement

MiCA National Discretions: Department of Finance publishes Feedback Statement

On 14 December 2023, the Irish Department of Finance published a feedback statement on its public consultation on the transposition of the national discretions included within the Markets in Crypto-Assets Regulation (MiCA) and confirmed that the Central Bank of Ireland will be the national competent authority in Ireland regarding MiCA.

Although the Department of Finance has declined to exercise all national discretions under MiCA, it has chosen to exercise discretions in the following areas:

Twelve-month transition period for existing crypto asset service providers (CASPs)

The Department of Finance has decided to implement a transitional period of 12 months (rather than the maximum 18 months permitted under MiCA), to uphold regulatory harmony throughout the EU and protect consumer interests.

MiCA provides for a transitional period, for existing CASPs providing services under national law before its applicable date (29 December 2024). Under a process known as grandfathering, these provisions permit existing CASPs to continue to provide services for up to 18 months after the date of application of MiCA (i.e. to June 2026), or until they are granted or refused authorisation under MiCA. However, Member States can decide not to apply this transitional period or to reduce its duration.

On 17 October 2023, the European Supervisory and Markets Authority (ESMA), sent a letter to the President of the Economic and Financial Affairs Council (ECOFIN) and issued a supporting statement, underscoring the need for coordinated action from EU Member States to ensure smooth, convergent, and effective application of MiCA. ESMA also asked Member States to consider reducing the discretionary transitional period to 12 months, to which Ireland has now signalled its agreement.

Administrative penalties and measures to align with the Central Bank administrative sanctions procedure (ASP)

MiCA allows Member State discretions concerning administrative penalties and other administrative measures regarding certain infringements of MiCA. Member States can also impose higher levels of penalties than those provided under MiCA in some instances.

In Ireland, regulatory breaches can already be pursued by the Central Bank as administrative breaches (known as ‘prescribed contraventions’) and the Central Bank can bring ASP proceedings in respect of such breaches under the Central Bank Act 1942.

  • The Department of Finance views that Ireland does not need to lay down rules for administrative penalties as those infringements are already subject to penalties in national law under the ASP.
  • For financial penalties, where the ‘minimum maximum’ amounts are lower under MiCA (e.g. €700,000 for natural persons), the Department views that these should be brought up to the ASP minimums.
  • All sanctions under the ASP should be available to the Central Bank for MiCA breaches and not just the minimum penalties listed under MiCA.

Discretions not being exercised by Ireland

Simplified procedure for applications for crypto asset service provider (CASP) authorisation

Currently, in Ireland, entities providing crypto-asset services are required to register with the Central Bank as virtual asset service providers (VASPs). The Central Bank supervises VASPs for anti-money laundering and countering the financing of terrorism purposes only. Otherwise, there is no national regime for the authorisation of CASPs.

Under MiCA, Member States may implement a “simplified procedure” for service providers which, on 30 December 2024, are authorised under national law to provide crypto-asset services.

Although most industry respondents to the consultation favoured a simplified procedure for applications for CASP authorisation, the Department of Finance has declined to exercise this discretion, noting that this position reflects the advice of ESMA and recognises that Ireland’s existing VASP registration process is not comparable to the MiCA CASP requirements.

The Department acknowledged that transparency of requirements and open communication channels with the Central Bank will be an important feature for entities applying for CASP authorisation.

Public disclosure of inside information

In certain circumstances, MiCA permits issuers, offerors or persons seeking admission to trading of a crypto-asset to delay public disclosure of inside information. MiCA also provides that when an issuer, offeror or someone seeking admission to trading has delayed the disclosure to the public of inside information, they must inform the national competent authority about the delay of disclosure and provide an explanation. Member States can choose between (i) requiring the explanation in all notification cases (baseline) or (ii) requiring the explanation only when specifically requested by the national competent authority (alternative). Ireland will not exercise its national discretion in this regard, maintaining consistency with similar regulations (the rationale being that should Ireland exercise this discretion it would facilitate a lower standard to what can be availed of).


The transposition date for MiCA to take effect in Ireland is 30 June 2024. Titles III and IV of MiCA will apply from 30 June 2024 and the regulation will fully apply from 29 December 2024.

Next steps

The Department of Finance will notify the European Commission, the European Banking Authority and ESMA, of its intention to designate the Central Bank as the national competent authority and how it plans to exercise its national discretions under MiCA. The Department of Finance will bring forward the necessary secondary legislation required to transpose MiCA into Irish law before 30 June 2024.

For our previous articles on the Department of Finance MiCA consultation and ESMA communiqué regarding MICA, please see here and here.

How we can help

Our Financial Regulation team has extensive experience securing the registration of VASPs and the authorisation of electronic money institutions, payment institutions and other regulated FinTechs. We have acted for one-third of the electronic money institutions which have been granted authorisation in Ireland to date. If you are considering applying for authorisation under the MiCA regime, please contact Shane Kelleher, Louise McNabola or your usual William Fry contact.


Contributed by Jane Balfe