This initiative is supplemented by a series of requirements directly applicable to the provision of cryptoasset services, such as bans on the provision and custody of anonymous wallets, greater traceability of ownership changes and an extension of the list of obliged entities to include all crypto-asset service providers. At the European level, the European Regulation on Markets in Crypto-assets, or MiCA as it is better known, is a regulatory initiative that seeks to offer a set of uniform rules and a common supervisory architecture to provide legal certainty and appropriate legal protection for crypto-asset users, thereby facilitating the orderly development of this ecosystem. As such, it envisages a range of provisions applicable both to crypto-asset issuers and to service providers. MiCA covers multiple types of crypto-asset service providers. It not only obliges them to obtain the necessary authorisation, but it also sets out various prudential, organisational and transparency requirements, as well as others relating to the safekeeping of clients’ funds, conflicts of interest and outsourcing, depending on the service provider's characteristics. In this respect, MiCA has much in common with the path followed by other jurisdictions, although the level of requirements and granularity included in these obligations is greater. One of the most pioneering aspects of MiCA is its approach to stablecoins, specifically as to the composition and management of their reserve assets and the conditions associated with their issuance. 31  FATF (2012), “International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation”, available at: https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf.

These mechanisms can take various forms, but all seek to offer sufficient certainty to system participants as to the correct status of the transaction ledger at any moment in time. One of the most well-known tools is the so-called proof-of-work or PoW, which requires complex and costly – primarily in energy consumption – computational calculations. It is precisely this latter aspect which is expected to deter irregular behaviour on the part of validators. However, the price of electricity, concerns about the environmental impact, the limited access to the specialised hardware required and scalability problems are some of the factors that are encouraging gradual migration to other types of solutions.8 Proof-of-stake or PoS is one such alternative. Its main characteristic is that validators are selected according to their direct economic stake in the network; in other words, depending on the amount of crypto-assets they own and must block to ensure that the operation is validated correctly. As they have a direct interest in preserving the value of the crypto-asset, in principle, this mechanism creates incentives to behave honestly. Moreover, as the possibility of their being assigned operations is generally connected with the volume of crypto-assets blocked, the network is less decentralised than under the other mechanisms. Although there are more options, where blockchain networks are set up as closed circuits (permissioned networks), a third mechanism, dubbed proof-of-authority or PoA, is generally prominent.