The European Union (EU) financial regulators want to add more stablecoin regulation guidelines under the Markets in Crypto-Assets (MiCA) regulatory framework by publishing draft regulatory standards for issuers of stablecoins when dealing with complaints.
The Regulatory Technical Standards (RTS) issued protocols on March 13 for efficiently and equitably resolving complaints by Asset Reference Tokens (ARTs) holders. These guidelines detail the procedures and standards for stablecoin issuers to effectively manage complaints.
The European Banking Authority (EBA) document said:
“Such a framework should support innovation and fair competition while ensuring a high level of protection of retail holders and the integrity of markets in crypto assets.”
According to the EBA report, this regulatory framework for stablecoins is an outcome of joint collaboration between the EBA and the EU’s markets regulator, the European Securities and Markets Authority (ESMA). Both entities conducted the consultations between July and October 2023.
This regulatory framework is due for submission to the European Commission for approval by the end of June. Subsequently, these standards will undergo review by the European Parliament and the European Council before being published in the Official Journal of the European Union, the bloc’s authoritative repository of existing laws.
Related: EU banking authority extends Anti-Money Laundering guidance to crypto
The MiCA regulatory framework within the bloc categorizes stablecoins that can be linked to multiple fiat currencies or other assets, including cryptocurrencies, as asset reference tokens (ARTs). This is distinct from stablecoins solely pegged to the value of a single currency, like the euro or dollar.
Prior to this, the EU has been actively monitoring stablecoins through the MiCA regulation. The push for stablecoin oversight became imperative after the collapse of Terra Luna’s UST, which raised concerns about their systemic implications. Independently, the EBA had previously suggested regulations for stablecoin issuers.
Another provision within the MiCA legislation also mandates rigorous screening of shareholders and board members for crypto asset service providers (CASPs). These rules seek to authorize CASPs while ensuring the separation of customer assets and trading. The goal is to avoid comingling of customer and company money, as in the case of FTX.
The full implementation of MiCA is anticipated by December, while the stablecoin regulation is slated for launch in the summer. MiCA legislation seeks to establish a comprehensive framework for crypto issuers, service providers, and users.
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