> For the complete documentation index, see [llms.txt](https://www.mica.wtf/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://www.mica.wtf/mica/recitals/5.md).

# Recital 5

MiCA Recital 5 — Regulation (EU) 2023/1114.

|                 |                                                                                 |
| --------------- | ------------------------------------------------------------------------------- |
| **Instrument**  | Regulation (EU) 2023/1114 (MiCA)                                                |
| **Source**      | [EUR-Lex](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114) |
| **Status**      | In force                                                                        |
| **Review rule** | Legal-text changes require human review                                         |

### (5)

The absence of an overall Union framework for markets in crypto-assets can lead to a lack of user confidence in those assets, which could significantly hinder the development of a market in those assets and lead to missed opportunities in terms of innovative digital services, alternative payment instruments or new funding sources for Union companies. In addition, companies using crypto-assets would have no legal certainty on how their crypto-assets would be treated in the various Member States, which would undermine their efforts to use crypto-assets for digital innovation. The lack of an overall Union framework for markets in crypto-assets could also lead to regulatory fragmentation, which would distort competition in the internal market, make it more difficult for [crypto-asset service providers](https://headlesslaw.com/definitions/mica/crypto-asset-service-provider/) to scale up their activities on a cross-border basis and would give rise to regulatory arbitrage. Markets in crypto-assets are still modest in size and do not at present pose a threat to financial stability. It is, however, possible that types of crypto-assets that aim to stabilise their price in relation to a specific asset or a basket of assets could in the future be widely adopted by retail holders, and such a development could raise additional challenges in terms of financial stability, the smooth operation of payment systems, monetary policy transmission or monetary sovereignty.


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