The European Union is Preparing a Complaint File About Stablecoin Issuers!
The European Union (EU) has published draft rules for stablecoin issuer complaint procedures.
The European Union (EU) financial regulators aim to add more stablecoin regulatory guidance under the Markets in Crypto Assets (MiCA) regulatory framework. This will be accomplished with the publication of draft regulatory standards that determine how stablecoin issuers should handle complaints.
Regulatory Technical Standards (RTS) were published on March 13 to ensure effective and fair resolution of complaints from asset reference token (ART) holders. These protocols detail the procedures and standards that stablecoin issuers should follow to effectively address complaints.
The following statements are found in the European Banking Authority (EBA) document.
“A framework should support innovation and fair competition, while also ensuring high levels of protection for retail holders and the integrity of markets in crypto-assets.”
This regulatory framework for Stablecoins, according to the EBA report, is a result of the collaboration between the EBA and EU’s market regulator, the European Securities and Markets Authority (ESMA). Consultations between the two bodies were held from July to October 2023.
The regulatory framework is intended to be presented to the European Commission for approval by the end of June. Following this process, the standards will be reviewed by the European Parliament and European Council and will then be published in the Official Journal of the European Union, which serves as the authoritative repository of current laws within the bloc.
Within the European Union (EU), the MiCA regulatory framework classifies stablecoins that can be pegged to multiple fiat currencies or other assets, including cryptocurrencies, as Asset Reference Tokens (ARTs). This is different from stablecoins that are tied to the value of a single currency, like the euro or dollar.
Previously, the EU had been actively monitoring stablecoins through the MiCA regulation. The demand for stablecoin oversight has become more urgent with the emergence of concerns about systematic effects following Terra’s UST’s collapse. Additionally, the European Banking Authority (EBA) had previously proposed regulations for stablecoin issuers.
Another provision within the MiCA law requires a rigorous review of the shareholders and board members of Crypto-Asset Service Providers (CASPs). These regulations aim to ensure the separation of customer assets and business activities during the authorization of CASPs, preventing the mixing up of customer and company funds, as was the case with FTX.
While full implementation of MiCA is expected by December, stablecoin regulation will begin in the summer. The MiCA law aims to create a comprehensive framework for crypto issuers, service providers, and users.