Regulation
EBA publishes new MiCA guidelines for regulating cryptoassets
THE European Banking Authority has published a comprehensive set of standards and technical guidelines under the Markets in Crypto-Assets (MiCA) Regulation.
These guidelines aim to clarify the regulation of asset-referenced tokens (ART) and electronic money tokens (EMT) across the European Union. The guidelines focus on various aspects, including stress testing programs, asset reserves and recovery plans. ARTs are tokens backed by assets such as commodities, real estate or a portfolio of different assets, while EMTs maintain a stable value by being pegged to fiat currencies and are used for payments, like stablecoins.
Key provisions include the requirement for token issuers to maintain sufficient financial resources (equity) to mitigate potential risks. The EBA has established criteria to assess higher risk scenarios requiring increased capital reserves.
The EBA reports outline the process and timeline for issuers to adjust their own funds to at least 3% of the average significant asset reserve, with an implementation plan expected within 25 working days and compliance total obligatory within six months.
In addition, the regulator imposes minimum percentages for asset reserves based on daily and weekly maturities and imposes restrictions on the concentration of issuers of highly liquid financial instruments. For tokens tied to unofficial currencies like commodities or real estate, similar limits apply to highly liquid assets.
Concerning recovery plans, the EBA incorporates feedback from consultations to clarify communication and disclosure requirements. It clarifies that certain exemptions provided for in the legislation already exclude EMT issuers from specific asset reserve obligations. These guidelines are an integral part of the implementation of the MiCA Regulation, with digital asset service providers required to adhere to the new standards by July 1, 2026.
Some information about MiCA
The MiCA Regulation, proposed by the European Parliament, aims to create a comprehensive framework for crypto assets within the European Union (EU). This initiative addresses the lack of specific legislative coverage for these assets within the EU, by providing clear and consistent legal regulations.
The main objectives of MiCA are to improve consumer and investor protection, promote financial stability and innovation, and support the adoption of crypto assets across the EU. The regulation classifies crypto assets into three main types: asset-referenced tokens (ART), electronic money tokens (EMT), and other assets not previously covered by EU law.
Introduced in June 2023, MiCA was designed to be implemented in stages. The stablecoin-related rules are expected to come into force in June 2024, while the remaining regulatory provisions are expected to come into force from December 2024, incorporating specific transitional measures.
In January 2024, the European Securities and Markets Authority (ESMA) has published two consultation papers on guidelines under the regulation of crypto asset markets.