Financial regulators within the European Union (EU) have urged stablecoin issuers along with other industry participants to adopt the guidelines set out in the Regulation of Markets in Crypto Assets (Mica).
MiCA is the first comprehensive digital asset regulatory framework covering exchanges, assets, and stablecoins, among others. Billed to take effect in June 2024, authorities have advised market players to begin preparations to ensure compliance.
In a new statement released Today by the European Banking Authority, the body listed the “guiding principles” for stablecoin issuers operating in the bloc’s 27 member countries.
In what many describe as preparation for MiCA, companies must adhere to full disclosure requirements with users and authorities and adopt standard MiCA risk management policies and business models.
The statements also include a financial template that companies are encouraged to follow in terms of communication, reservation, recovery and reimbursement agreements.
According to the statement, these rules are currently not binding but “encourage timely preparatory actions” to protect investors before the law takes effect.
Consumers also do not benefit from rights and will not be protected by MiCA from now until June 30, 2024.
“Consumers are reminded that prior to June 30, 2024 (MiCAR application date), ARTs and EMTs are not instruments regulated by MiCAR and therefore consumers do not yet benefit from the rights and protections set forth in My car”.
ESMA issues first crypto regulation
The European Securities Market Authority (ESMA), the EBA’s securities counterpart, has also launched its first set of proposals since he granted the powers under MiCA.
The new proposals published today apply to companies that classify as crypto asset service providers (CASPs), a term that includes trading companies, exchanges, brokers, issuers, etc.
The proposals will include the consultation of firms under CASP, since they must provide feedback to the agency on issues related to “authorization, identification and management of conflicts of interest.”
Companies are expected to notify the body prior to commencement and also after subsequent changes to their structure.
These rules come as the EU tightens regulatory loopholes in digital assets after clamor to clarify the rules in the United States and other jurisdictions.
Many have called the FTX crash an avoidable disaster if there were better rules, especially when it comes to user asset mix.
A key focus of ESMA is ensuring investor safety through laws against asset mixing, as is the case in traditional finance.
