The Central Bank of Ireland (CBI) held its latest MiCAR briefing on 28 March 2025, in a welcomed and well-attended session.
In an address from Gerry Cross, Director of Capital Markets & Funds, CBI, he said “A key purpose of our event this morning is to facilitate a conversation. It is designed in particular to provide further support to industry participants who are in the process towards obtaining Central Bank authorisation as MiCAR firms, or who may be thinking about applying for such authorisation.”
Speaking in the context of engagements already underway, Cross highlighted specific issues to focus on:
“Substantive presence: We believe that MiCAR provides a constructive way forward to give legal clarity within a harmonised manner across the EU. We believe that building an EU crypto ecosystem demands commitment. As such, substance is of critical importance. I won’t focus on our lack of appetite for firms that seek to operate on a “brass plate” basis, rather I want to encourage firms to recognise the opportunity of investing appropriately in their EU entity seeking CASP Authorisation and the long term benefits to them of contributing to the development of the EU crypto ecosystem.
Outsourcing: Outsourcing is part of every modern business and we recognise its benefits. Leveraging intra-group entities and functions can bring additional strength as well as efficiencies. There are, of course, limits to the level of outsourcing that works. A firm cannot outsource to the extent that it becomes an empty shell or in a manner that means a core activity and the effective accountability for it are moved outside the firm.
Alignment with MiCAR and the ESMA Broker Model: A critical point of concern for us is that business models should align with MiCAR, including the ESMA Broker Model Opinion. We have and will continue to push strongly against business models that do not adhere to this, in line with our European counterparts.
Clarity on the activities for which you need authorisation: An issue we are finding commonplace is that firms are not clear on their full business model and the activities they need authorisation for. Here we have worked with firms to unpack elements of their proposals, bringing questions to the table to help drive clarity.
Governance and Safeguarding: Regardless of the services, the target customer base, or whether the business is retail focused or aimed at institutional clients, governance and safeguarding of client assets are critical considerations for the Central Bank.”
A further address form Sonia Weafer, Head of Function, CASP & MiFID Authorisation, CBI, highlighted key areas of improvement for enagements going forward, before a panel fielded pre-submitted and live questions with demand exceeding time.
Room for Improvement – Areas for Firms to Address, Opportunities for Growth
- Poor response times, lack of meaningful engagement.
- Business model not clearly described.
- Substance and sufficient resourcing within this state is not demonstrated.
- Heavy reliance on outsourcing without strong evidence of strategic control and direction.
- Authorisation sought for activities/services that do not align with business model.
- Key documents, policies unavailable (or not localised).
- Unsuitable Board composition and/or key PCF roles not proposed or identified.
- Insufficient conflicts of interest risk mitigation within CASP.
- Failure to demonstrate sufficient control over client assets (private keys, generation and storage).
- Business model proposed is in breach of regulation, eg ESMA Broker Model Opinion.
In her closing remarks, Denis Delaney, Head of Division, Supervisory Risk and Horizontal Division, CBI, said that CBI is “100% resourced” to address the pipeline of authorisation applicants.
The CBI MiCAR online resources are growing, and can be found here.
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