The EBA consults on draft technical standards on own funds requirements and stress testing of issuers under MiCAR

The European Banking Authority (EBA) today a launched two consultations on draft Regulatory Technical Standards (RTS) on own funds requirements and stress testing of issuers under the Markets in Crypto-Assets Regulation (MiCAR) which form part of the prudential package of MiCAR products. The first RTS specify the adjustment of own funds requirements and stress testing of issuers of asset-referenced tokens and e-money tokens. The second RTS specify the procedure and timeframe to adjust its own funds requirements for issuers of significant asset-referenced tokens or of e-money tokens.  These consultations, together with other consultations papers published today, form part of the third batch of MiCAR policy products. The consultations run until 8 February 2024.

The draft RTS on the adjustment of own funds requirements and design of stress testing programmes for issuers specify: i) the criteria for the assessment of  ‘higher degree of risk’, ii)  the procedure for competent authorities to determine the period of time considered appropriate for issuers to increase the own funds amount to the higher own funds requirements and the measures to be taken to ensure the timely compliance thereof and iii) a minimum set of requirements to issuers for the design and implementation of their stress-testing programmes.

The mentioned requirements apply to issuers of asset-reference tokens (ARTs) subject to own funds requirements as well as to electronic money institutions issuing e-money tokens (EMTs) that are significant under MiCAR and can be expanded to e-money institutions issuing EMTs that are not significant if the competent authority of the home Member State requires it.

While other draft RTS specify the procedure and timeframe for issuers to adjust their own funds requirements to 3% of the average amount of the reserve assets when their ARTs are classified as ‘significant’ ARTs.

Consultation process

Comments on the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.

These consultation papers form part of the prudential package of MiCAR products, for which the EBA will hold a hybrid public hearing on 30 January from 10:00 to 16:00 CET. The EBA invites interested stakeholders to register using this link by 23 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered to virtually attend the meeting.

All received contributions will be published following the end of the consultation, unless requested otherwise.

Legal basis

The EBA has developed these draft RTSs in accordance with Article 35(6) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) and in close cooperation with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), which mandates the Authority to further specify the procedure and timeframe for issuers to adjust to higher own funds requirements, the criteria for requiring a higher amount of own funds and develop the minimum requirements for the design of stress testing programmes and in accordance with Article 45(7)(c) of MiCAR and in close cooperation with the European Securities and Markets Authority (ESMA), which mandates the Authority to specify the procedure and timeframe for an issuer of a ‘significant’ token to adjust the amount of its own funds.

Background

MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs will be applicable from 30 June 2024.

Among the activities within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of ARTs and EMTs and issuing such tokens. Supervision tasks are conferred on the EBA for ARTs and EMTs that are determined by the EBA to be significant. Additionally, the EBA is mandated to develop 17 technical standards and guidelines under MiCAR to further specify the requirements for ARTs and EMTs, and an additional 3 mandates jointly with ESMA (and, in one case, also with EIOPA).