The financial regulators of the European Union (EU) are looking to enhance regulation guidelines for stablecoins under the Markets in Crypto-Assets (MiCA) regulatory framework. They plan to achieve this by releasing draft regulatory standards that outline how stablecoin issuers should handle complaints.
On March 13, the Regulatory Technical Standards (RTS) published protocols that aim to efficiently and fairly address complaints made by asset reference token (ART) holders. These guidelines provide detailed procedures and standards for stablecoin issuers to effectively manage and resolve complaints.
According to a document from the European Banking Authority (EBA), this regulatory framework for stablecoins is the result of a collaboration between the EBA and the EU’s markets regulator, the European Securities and Markets Authority (ESMA). Both entities conducted consultations between July and October 2023.
The European Banking Authority announced the final draft Regulatory Technical Standards (RTS) under MiCA regulations. The screenshot of the announcement can be found on the EBA’s website.
The submission of this regulatory framework to the European Commission for approval is expected to be completed by the end of June. Following that, the standards will undergo review by the European Parliament and the European Council before being published in the Official Journal of the European Union, which serves as the bloc’s authoritative repository of existing laws.
The MiCA regulatory framework categorizes stablecoins that can be linked to multiple fiat currencies or other assets, including cryptocurrencies, as ARTs. This is in contrast to stablecoins that are solely pegged to the value of a single currency, such as the euro or dollar.
Prior to this development, the EU had been actively monitoring stablecoins through the MiCA regulation. The need for stablecoin oversight became more apparent after the collapse of Terra’s UST, which raised concerns about the potential systemic implications. The EBA had previously proposed regulations for stablecoin issuers.
Another provision within the MiCA legislation requires thorough screening of shareholders and board members of crypto asset service providers (CASPs). These rules aim to authorize CASPs while ensuring the segregation of customer assets and trading. The goal is to prevent the mingling of customer and company funds, as seen in the case of FTX.
The full implementation of MiCA is expected to take place by December, while the stablecoin regulation is set to be launched in the summer. The MiCA legislation aims to establish a comprehensive framework for crypto issuers, service providers, and users.
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