Proposal for level II rules for crypto-assets

The European Banking Authority (EBA) has published a proposed level II regulation package including several regulatory technical standards and guidelines (RTSs) under Regulation (EU) No 2023/1114 on Markets in Crypto Assets (MiCA). The proposed technical standards will be submitted to the Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council, before coming into effect (as amended). 

MiCA will enter into force in the EU, partly on 30 June 2024 and in its entirety on 30 June 2024. It will regulate providers of crypto-asset services and issuers of cryptocurrencies, covering a wide range of new definitions, digital currencies, tokens, and financial operators in the market, which necessitates regulatory guidance.

Last week you could read our most recent news article on MICA, mapping out how and when the regulation will be implemented and transposed in the Scandinavian countries.  

The proposed technical standards published by EBA contain clarifications pertaining to a number of MiCA provisions, covering, inter alia, the following regulatory aspects: 

• The own funds requirement and minimum features of stress testing programmes of issuers of asset-referenced tokens (ARTs) and of e-money tokens (EMTs), and the procedure and timeframe for an issuer to adjust the amount of its own funds to 3% of the average amount of asset reserves.
• The liquidity requirements of asset reserves.
• The framework and provisions on highly liquid financial instruments.
• The minimum standards and provisions on issuers and crypto asset services providers' internal policy framework for liquidity management.   
• Guidelines on recovery plans, specifying the format and content of the recovery plan that issuers need to develop and maintain as part of its internal compliance framework. 

You can read the proposals on EBA: s website. 

If you have any questions relating to if certain business operations fall within the scope of MiCA or if you need legal guidance related to the interpretation or implementation of the abovementioned RTSs, we are here to assist. 

Our dedicated team of financial regulatory lawyers is at the forefront of the legal fintech and Paytech environment and provides top-tier legal advice to the industry on a cross-border pan Scandinavian level, whilst always keeping the client’s business in focus.