EBA encourages timely preparatory steps towards the application of MiCAR to asset-referenced and electronic money tokens

EBA issued a statement addressing financial institutions and other entities engaged in ART or EMT activities before 30 June 2024, the application date for the relevant provisions of the MiCAR. The statement aims to encourage preparatory actions towards MiCAR application, reduce risks of disruptive business adjustments, promote supervisory convergence, and protect consumers.
The guiding principles in the statement include:
– Disclosures and Fair Treatment: Entities involved in ART/EMT activities should adhere to high standards of disclosure to potential acquirers and holders, treat token holders equally (unless otherwise disclosed), and have effective complaints handling policies.
– Well-Defined Business Model: Entities should have a clear description of their business model’s viability, sustainability, sources of revenue, and token distribution model.
– Sound Governance and Risk Management: Entities should have a clear organizational structure, a management body with appropriate expertise, and effective risk management processes, including addressing liquidity, credit, and market risks.
– Robust Reserve, Recovery, and Redemption Arrangements: Entities issuing ARTs should maintain a reserve of assets and sufficient own funds, provide redemption rights to holders, and establish recovery and redemption plans.
– Communication with Competent Authorities: Entities should communicate with the relevant competent authority about their intention to offer ARTs or EMTs using a template provided by the EBA.
The EBA reminds consumers that before 30 June 2024, ARTs and EMTs are not regulated instruments under MiCAR, and consumers should be cautious and aware of the risks associated with crypto-assets.