Spain Accelerates MiCA Implementation by 6 Months

Spain has established itself as a crypto-friendly nation, allowing trading, mining, and usage of cryptocurrencies, although they do not hold legal tender status. The country is actively implementing the European Union’s Markets in Crypto-Assets (MiCA) regulation, aiming for full enforcement by December 2025. This approach balances innovation with investor protection, making Spain an attractive destination for crypto activities.

Investors and businesses in Spain must adhere to the country's crypto regulations to remain compliant while capitalizing on market opportunities. A structured regulatory environment enhances the safety and trustworthiness of the crypto system, reducing fraud and building user confidence. The National Stock Market Commission (CNMV) oversees MiCA compliance, while the Bank of Spain manages the Virtual Currency Service Provider (VCSP) registration process.

Historically, Spain's regulatory journey with cryptocurrencies has evolved significantly. Initially, there was no specific legislation, and cryptocurrencies were governed by general financial laws without legal tender status. Key milestones include the establishment of virtual assets through Royal Decree 7/2021, the introduction of the LMVSI and MiCA sanctions under Law 6/2023, and the provision of tax incentives and regulatory sandboxes under Law 28/2022. Spain has accelerated the implementation of MiCA, aiming to complete it by December 2025, six months ahead of the EU's default timeline.

The regulatory framework in Spain is overseen by two main authorities: the CNMV, which regulates crypto-asset service providers (CASPs) and advertising, and the Bank of Spain, which manages VCSP registration and supervises electronic money and asset-referred tokens under MiCA. Registration is mandatory for VCSPs, requiring them to submit forms CRIPTO01, CRIPTO03, and CRIPTO05 to the Bank of Spain. By 2024, around 100 companies had been registered, and under MiCA, they must also be licensed by December 30, 2024. Entities operating in the space market must be licensed by December 30, 2025, with a simplified procedure during the transition.

Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements are stringent in Spain. VCSPs must report transactions above EUR 30,000 (cross-border), EUR 1,500 (remittances), and EUR 10,000 (cross-border movements) to SEPBALC. The Regulation (EU) 2023/1113 requires traceability of transfers, including non-custodial wallets, greater than or equal to EUR 1,000. Crypto transactions are taxed progressively, with rates ranging from 19% to 28% depending on the profit range. Since January 1, 2024, taxpayers must file Form 172 (virtual currency balances), Form 173 (transactions), and Form 721 (holdings abroad over EUR 50,000).

Initial Coin Offerings (ICOs) and Security Token Offerings (STOs) are regulated under securities laws if deemed public offerings. Token security is regulated by Law 6/2023, which includes Distributed Ledger Technology (DLT) for the issuance and custody of these assets. Non-Fungible Tokens (NFTs) are generally unregulated unless they fall under financial instruments or securities categories. Crypto transactions are allowed in Spain, although not recognized as legal tender. MiCA applies to decentralized assets, including Bitcoin and DeFi aspects, but not to centralized services, which face increased regulatory oversight.

Crypto mining in Spain is subject to general acts related to energy consumption and tax, with no special limitations. The Bank of Spain supports blockchain initiatives, including an EURM stablecoin on Ethereum 2.0 issued by MONEI. Spain is part of EU projects on digital currency, such as a digital euro, and provides regulatory sandboxes under Law 28/2022 for testing innovations. Non-compliance with crypto regulations can result in fines, suspensions, or even criminal charges, especially in cases involving fraud or money laundering.

Law 28/2022 creates regulatory sandboxes, providing a controlled environment for blockchain start-ups to test innovations under regulatory supervision for a period of one year. As more people adopt crypto, clear regulations fuel its acceptance across various industries. Spain supports blockchain projects, including stablecoin EURM and initiatives aligned with EU regulations. However, the transition to MiCA may create temporary disruptions due to inconsistencies in national and EU laws. The anonymous nature of cryptocurrencies poses challenges to enforcing AML and KYC regulations, complicating the decentralized nature of transactions.

Spain's proactive stance on adopting MiCA by December 2025, ahead of the EU’s July 2026 deadline, demonstrates a robust licensing process prepared by the CNMV and Bank of Spain. The full implementation of MiCA is expected to attract more crypto businesses, positioning Spain as a significant crypto hub in the EU. The regulation will be investor-focused while supporting innovation, potentially influencing EU neighbors and global markets with harmonized standards and alleviating fears around cross-border crypto trade.

In conclusion, Spain's upcoming implementation of MiCA is supported by a crypto-friendly yet cautious approach, ensuring a balanced environment that supports both innovation and security. Investors and businesses must remain compliant with the changing market to thrive. As Spain continues to shape its crypto landscape, staying updated with regulatory changes is essential for success.