• The EU has passed new crypto laws known as Markets in Crypto Assets Regulation (MiCA) to regulate stablecoin issuers.
• These regulations mean that if the reserves of a stablecoin issuer have derivatives or covered bonds, they must comply with additional obligations and be supervised by the European Banking Authority.
• The EBA has proposed a range of indicators to determine whether a stablecoin is linked to other parts of the financial world.

EU Stablecoin Issuers Get Extra Regulation

The EU has passed new crypto laws called Markets in Crypto Assets Regulation (MiCA) in order to regulate stablecoin issuers who have reserves with derivatives or covered bonds. This means that these issuers must comply with additional obligations and be supervised by the European Banking Authority (EBA).

EBA Drafts New MiCA Rules

The EBA has circulated draft rules which state that any stablecoins deemed to be overly connected to the financial system face extra capital requirements and centralized supervision by the European Union (EU). Additionally, any significant asset-referenced token or e-money token issuer must comply with additional obligations and their supervision is partly or fully assigned to the EBA.

Indicators To Determine Financial Significance Of Stablecoins

In December, the European Commission asked the bank agency for advice on how to decide that a stablecoin is linked to other parts of the financial world or is internationally significant, with a deadline of Sept. 30. The EBA has now set out a range of tentative indicators such as:

• The share of assets held in reserve issued by other regulated financial institutions other than deposits • The market share of cross border payments • Number of users and market capitalization

Extra Obligations For Significant Tokens

Under MiCA, if a stablecoin is deemed significant it will be supervised by the EBA rather than national regulators, must carry out extra stress tests, and its reserve funds must equal 3% instead of 2%.

Consultation On New Regulations Until September 30th

The document containing these regulations is open for industry views until September 30th.

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