As a seasoned crypto investor with a few years under my belt, I welcome the European Banking Authority’s (EBA) new guidelines for crypto token issuers in Europe. This is an important step towards creating a more stable and trustworthy ecosystem for digital assets.
The European Banking Authority (EBA) has unveiled fresh instructions for entities issuing specific cryptocurrency tokens within the European Union. This represents the practical application of the Markets in Crypto-Assets (MiCA) legislation throughout the EU.
In accordance with the directives, six essential aspects of stress testing programs, asset reserve schemes, and recovery plans are addressed. under MiCA’s purview, there exist two primary categories of tokens subject to regulatory oversight:
- Asset-Referenced Tokens (ARTs) – These are tokens backed by real-world assets like commodities, real estate, or a basket of different assets.
- E-Money Tokens (EMTs) – These are designed to hold a steady value by being pegged to traditional currencies like the euro or dollar, similar to stablecoins used for payments.
One key regulation is that entities responsible for releasing tokens must possess sufficient own funds as a safeguard against potential risks. The European Banking Authority (EBA) has established thresholds indicating when issuers should boost their reserve funds due to increased risk levels.
In addition, there are newly established minimum proportions for the asset reserves related to short-term liabilities maturing on a daily and weekly basis. It is important that issuers do not hoard excessive amounts of highly liquid assets, such as cash, within these reserves.
The European Banking Authority (EBA) has set deadlines for funds under my investment to reach a minimum of 3% of their significant asset reserves. I have 25 business days to submit a compliance plan, and up to 6 months for full implementation.
Starting from July 1, 2026, these regulations apply to every digital asset service provider in Europe under the wider implementation of the MiCA legislation across the region.
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2024-06-14 02:28