With the aim of protecting consumers, preventing financial crimes and ensuring market integrity, the European Commission proposed the Markets in Crypto-Assets Regulation (MiCA) in 2020, which helped regulate Crypto-Asset Service Providers (CASPs). In this article, we will learn more about CASPs.
What is a CASP?
The Crypto Asset Service Crypto-asset Service Providers (CASPs) are financial and commercial entities specialized in providing services related to cryptocurrencies or crypto-assets. In order to provide such services while ensuring a certain level of security and transparency, CASPs must comply with certain specific regulatory standards and obtain authorization granted by the Markets in Crypto-assets Regulation (MiCA).
Depending on the services they offer and how CASPs operate, they can be considered financial and/or commercial entities, however, this combination allows CASPs to provide a wide range of solutions related to the management, exchange, and investment in crypto-assets.
CASP, as a Financial Institution
Crypto Asset Service Providers (CASPs) can be considered financial entities when they offer the following services:
Storage and custody
CASPs can offer secure storage and custody solutions for cryptocurrencies or crypto assets, similar to the asset custody services offered by traditional financial institutions such as banks.
Loans
CASPs have the ability to offer lending services similar to the financial services provided by traditional banks. In this case, CASPs provide loans using cryptocurrencies or cryptoassets as collateral.
Exchange
Crypto Asset Service Providers (CASP) have the ability to offer the Exchange service and thus facilitate the exchange between cryptocurrencies and FIAT currencies. Which allows users to align themselves with financial trading services.
Consulting
CASPs are financial entities that have specialists in the field, which allows them to offer financial advisory services related to investments in crypto-assets. Like the advisory services of traditional entities specialized in fiduciary or traditional assets.
CASP, as a Commercial Entity
Crypto Asset Service Providers (CASPs) may be considered business entities when they offer the following services:
Brokerage Service
Authorized CASPs can offer a Brokerage service through which they function as intermediaries to facilitate the purchase and sale transactions of crypto-assets.
Payment processing service
CASPs can offer payment processing services that facilitate transactions for companies and businesses that use crypto assets, making it easier for them to integrate cryptocurrencies into their payment methods.
What do you think about this topic? Do you want to know more about Crypto Asset Service Providers?
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