The European Banking Authority (EBA) recently released the final draft technical standards on prudential matters for firms to comply with under the Markets in Crypto Assets (MiCA) legislation. This legislation, which was passed last year, aims to regulate the crypto sector and provide rules for crypto companies and stablecoin issuers.
The technical standards outlined by the EBA cover a wide range of aspects, including stress testing programs, liquidity requirements for reserve assets, and the development of a recovery plan for issuers. For example, issuers of asset-referenced tokens are required to conduct stress testing based on various financial stress scenarios. Competent authorities have the authority to adjust the own funds requirements for issuers based on the risk outlook and stress testing results.
These draft technical standards were developed in collaboration with other bodies such as the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB). The aim is to ensure a comprehensive and consistent approach to regulating the crypto sector across all 27 EU member states.
Overall, the publication of these final draft technical standards is a significant step towards implementing the MiCA legislation and providing clarity and guidance for firms operating in the crypto space. By setting out clear criteria and requirements, the EBA is helping to create a more stable and secure environment for crypto asset transactions within the EU.
It is important for firms to familiarize themselves with these technical standards and ensure that they are in compliance to avoid any potential penalties or regulatory issues. The EBA’s efforts to work closely with other EU bodies and stakeholders demonstrate a commitment to creating a robust regulatory framework that protects investors and promotes the growth of the crypto sector in Europe.