Prepared by Fabrizio Cascinelli, Francesco Della Scala
On 8 November 2023, the European Banking Authority (EBA) put out for consultation additional technical standards and Guidelines pursuant to the so-called Market in Crypto-Assets Regulation (MICA), i.e. Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets.
It is worth recalling that the Regulation defines “crypto-asset” as “a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology” and outlines three typologies of crypto-assets: asset-referenced tokens, e-money tokens and utility tokens, establishing specific rules for each category.
With reference to timing, the MICA Regulation will be applicable in its entirety as of 30 December 2024; however, the requirements for asset-referenced tokens and e-money tokens will be applicable as of 30 June 2024.
For the full implementation and applicability of the rules set out by MICA, EBA and ESMA are required to develop (in certain cases jointly) Regulatory Technical Standards (RTS), Implementing Technical Standards (ITS) and guidelines.
The EBA’s activities commenced in July 2023 with the publication of three consultation papers (the final drafts of which are awaited); a further two draft technical standards and two draft guidelines were put out for consultation on 20 October 2023 (consultations open until 22 January 2024).
The present consultations represent the third set of rules to be developed by EBA and cover several themes relating to issuers of asset-referenced tokens as well as, in some instances, issuers of e-money tokens.
Following is a summary of the documents released for consultation.
Regarding liquidity requirements for issuers of asset-referenced tokens, the EBA published 3 drafts of RTS and one draft of Guidelines, which in detail cover:
- the definition of financial instruments that can be considered highly liquid and that present minimal market, credit and contraction risk for the purposes of the portion of the liquidity buffer that issuers must invest in such instruments (RTS ex Art. 38(5), MICA);
- the liquidity requirements of the reserve assets to be established and maintained by issuers (RTS ex Art. 36(4), MICA);
- the minimum contents of the policy and procedures for the liquidity management of issuers of significant asset-referenced tokens (RTS ex Art. 45(7)(b), MICA);
- common reference parameters of the stress test scenarios to be included in the liquidity stress tests that issuers are required to conduct periodically (Guidelines ex Art. 45(4), MICA).
With respect to own funds requirements, the EBA has published 2 RTS drafts covering the procedure and timing for compliance with higher own funds requirements that may be imposed by the competent authority (RTS ex Art. 35, MICA), including with respect to significant tokens (RTS ex Art. 45(4), MICA); said technical standards are addressed to issuers of asset-referenced tokens and issuers of e-money tokens.
For the purposes of the quarterly reporting to the Competent Authority required for each asset-referenced token with an issue value in excess of EUR 100,000,000, EBA has published drafts of regulatory and implementing technical standards in order to specify the methodology for estimating the required information as well as the standard forms, formats and templates to be used for reporting (RTS ex art. 22(6) and ITS ex Art. 22(7), MICA); such reporting is required for issuers of asset-referenced tokens and issuers of e-money tokens denominated in a currency that is not an official currency of a Member State (as provided for in Art. 58(3), MICA).
Lastly, the following should be noted:
- the draft Guidelines concerning the format and information of the recovery plan to be developed and maintained by issuers of asset-referenced tokens and issuers of e-money tokens (Guidelines ex Art. 46 and 55, MICA);
- regulatory technical standards relating to supervisory colleges for issuers of significant asset-referenced tokens and significant e-money tokens (RTS ex Art. 119(8), MICA).
The consultations will close on 8 February 2024.
Subsequently, EBA will submit the final reports based on the feedback received to the European Commission for approval by 30 June 2024.
Consultation Paper. Draft RTS on supervisory colleges under Article 119(8) of MiCAR
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