ALFI responds to the second ESMA’s consultation on proposed RTS/ITS on MiCA

ALFI responded to the second ESMA’s consultation package on Technical Standards specifying certain requirements of MiCA, provides a detailed response to ESMA regarding the proposed technical standards. The response addresses various aspects of the proposed technical standards, focusing on sustainability disclosures, coherence, complementarity, and proportionality, practical approach to assessing sustainability impacts of consensus mechanisms, optional sustainability indicators, presentation of sustainability disclosures, calculation guidance for energy use and GHG emissions, and organizational measures for specific CASP services.
ALFI generally agrees with ESMA’s assessment of the mandate for sustainability disclosures under MiCA. However, it highlights the specificities of crypto assets disclosure and the central role of the whitepaper in this regard. ALFI emphasizes the importance of allowing CASPs to make references to and rely on the white paper to comply with the disclosures requirement. Additionally, ALFI suggests that the responsibility of disclosed information should depend on the respective role of each actor, considering the diversity and heterogeneity of DLT technical solutions and protocols.
ALFI supports ESMA’s approach to ensure coherence, complementarity, consistency, and proportionality, but raises concerns about data availability as a challenge for the industry in terms of quality, reliability, and comparability of disclosures. ALFI advocates for a gradual, pragmatic implementation, considering the central prerequisite of data availability and the application of the proportionality principle to address the data challenge.
Regarding the practical approach to assessing the sustainability impacts of consensus mechanisms, ALFI raises concerns about the language used in reporting and emphasizes the need for clear, easily understandable, and non-ambiguous sustainability indicators. ALFI suggests that mandatory indicators should only be deemed mandatory where actual quality data is available to avoid misunderstanding. It also emphasizes the importance of consistency of data, indicators, and methodologies across all disclosures in the whitepaper.
ALFI expresses the view that none of the proposed optional sustainability indicators should be mandatory in the initial stage, focusing on clarity, comparability, and consistency. It also highlights the need for a stand-alone and closed taxonomy format for the white paper, with a provision for potential evolution of the template based on material technology and market developments.