The European Union developed the Digital Operational Resilience Act (DORA) and the Markets in Cryptoassets Regulation (MiCA), two regulatory standards that aim to improve the stability and security of the European Union financial system. However, even though both standards contribute to a more solid and reliable financial ecosystem, there are some notable differences between both regulations. Below, we will learn about the main differences between the DORA and MiCA regulations of the European Union.
Purpose
The Digital Operational Resilience Act (DORA) and the Markets in Cryptoassets Regulation (MiCA) are European Union regulations that serve different purposes. For example, the Digital Operational Resilience Act (DORA) aims to ensure the resilience of financial institutions and service providers to information technology risks and to reduce the risk of cyberattack communication (ICT).
For its part, the Cryptoasset Markets Regulation (MiCA) aims to create a regulatory framework for cryptoassets within the member states of the European Union, providing greater legal certainty and protection, both to consumers and to the market in general.
Scope
The DORA Law was developed to be applied to financial institutions and critical entities within the European Union financial market, which must comply with the DORA Law by adopting and applying ICT systems and processes that allow them to withstand possible failures or operational interruptions, in addition to other risks related to information and communication technologies (ICT).
On the other hand, MiCA has a more limited scope in relation to the DORA law, since MiCA was developed to be applied to entities, institutions, and companies providing financial services and organizations that operate in the market and that are involved in the issuance, negotiation, and custody of cryptoassets (Crypto Asset Service Providers, CASP) within the European Union.
Approach
The DORA Act primarily focuses on ensuring the resilience, responsiveness, and recovery of financial institutions and firms within the European Union that may be affected by operational disruptions and ICT-related cyber threats.
On the other hand, MiCA focuses primarily on ensuring that the crypto-asset market within the European Union remains with a high degree of integrity and financial stability, as well as guaranteeing the trust and security of consumers and investors.
Key elements
The Digital Operational Resilience Act (DORA) and the Markets in Cryptoassets Regulation (MiCA) differ in the way they regulate, as they make use of different key elements to achieve their objective.
DORA Act seeks to improve the resilience of companies, financial institutions, and ICTs through key elements such as risk management, third-party monitoring (critical ICT service providers), incident reporting standards, and ICT system testing.
MiCA, for its part, seeks to regulate the cryptoasset market through key elements such as requirements for cryptoasset issuers and service providers, rules for cryptoasset trading platforms, and the classification and regulation of cryptoassets.
What do you think about this topic? Do you want to know more about the European Union’s DORA and MiCA regulations?
If you are interested in Pilsenga products or services, you can contact us by visiting the following link.
