Today’s publication will analyse the circumstances in which issuers of asset-referenced tokens required authorization under Chapter 1 of MiCA. Firstly it is important to analyse what is asset-referenced tokens. In accordance with article 3 of MiCA asset -referenced token means “a type of crypto-asset that purports to maintain a stable value by referring to the value of serveral fiat currencies that are legal tender, one or several commodities or one or several crypto-assets or combination of such assets.” It is important to be noted that asset-referenced tokens are also well known as stable coins.
According to article 15 of Chapter 1 of MiCA, issuers of asset-referenced tokens who offer such tokens to the public or seek admission of such assets to a crypto-asset trading platform must obtain authorization by the competent authority of their Home Member State. It is worth to be noted that only legal entities established in EU are eligible for authorisation.
The authorisation granted by the competent authority will be valid for the entire Union will allow an issuer to offer the asset -referenced to tokens throughout the EU or seek an admission of such tokens to trading platform. The approval granted by the competent authority of the issuer’s crypto asset white paper will also be valid for the entire EU.
The European Banking Authority (EBA) and the European Securities and Market Authority (ESMA) will jointly develop draft regulatory technical standards to specify the procedure for the approval of a crypto-asset white paper.
There are exemptions in which authorisation is not required for issuers of asset-referenced tokens. These include the following cases:
i) when the average outstanding amount of asset-referenced tokens over a 12 month period does not exceed EUR 5 million or the equivalent in another currency;
ii) the offer to the public of the asset-referenced tokens is solely addressed to qualified investors and the tokens can only be held by such qualified investors; or
iii) when issuers of asset -referenced tokens are authorized as a credit institution in accordance with Article 8 of the Directive.
However, in all cases, issuers of asset-referenced tokens must produce a crypto-asset white paper and notify that white paper, and where applicable, their marketing communications to the competent authority of their Home Member State.
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