European Banking Authority emphasizes application of MiCAR, priorities to supervise ART, EMT issuers

Web3/Crypto

Jose Manuel Campa, Chair of the EBA | LinkedIn

By Crypto Republique

Jul 29, 2024

The European Banking Authority (EBA) issued a statement for individuals interested in issuing, offering, or trading asset-referenced tokens (ARTs) and e-money tokens (EMTs), highlighting priorities for the consistent application of markets in crypto assets (MiCAR). The EBA made this statement on July 5.

The European Banking Authority is an independent EU Authority that works to ensure effective and consistent prudential regulation and supervision in the European banking sector, according to the EBA’s "About Us" page. The organization is dedicated to contributing to the stability and effectiveness of the European financial system.

According to MiCAR, a regime was created to allow for the regulation and supervision of crypto asset issuance and crypto asset service provision in the European Union. The EBA issued a statement focused on MiCAR on July 12. It discusses the guiding principles for financial institutions that may carry out ART/EMT activities and encourages financial institutions to complete a comprehensive legal assessment to ensure that the ART/EMT activities are legal and to determine what legal, regulatory, and supervisory conditions are required where the institution is located. The EBA also suggests conducting a robust assessment of how the ART/EMT activities might affect the organization’s risk management profile.

The guiding principles include disclosure to potential acquirers and holders of ARTs and EMTs, fair treatment, having a well-defined business model, ensuring sound governance including effective risk management commensurate with the nature, scale, and complexity of the ART/EMT activities and the wider business model of the entity; creation of robust reserve, recovery, and redemption arrangements; communication of information to the competent authority of the intention to offer ARTs or EMTs to the public or seek admission to trading, according to the July 12 statement from the EBA.

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