Stablecoins in the crosshairs of the European regulation on MiCA crypto-assets, Actualité/Actu Epargne

Presented almost 2 years ago, the proposal for a European regulation on MiCA crypto-assets has finally reached a preliminary agreement. Its main purpose is to better protect consumers against certain risks and fraud related to investments in cryptocurrencies.

While current consumer rights to protection or remedies are very limited, especially if transactions take place outside the European Union, crypto asset service providers will require authorization to conduct their business within the EU. The national authorities must issue this permit within three months. With regard to the largest crypto asset service providers, national authorities will have to report information regularly to the European Securities and Markets Authority (ESMA).

Liability of the platforms involved in the event of loss

The agreement also stipulates that crypto asset service platforms must comply with strict consumer protection requirements. Most importantly, their liability would now be incurred in the event of loss of investors’ crypto assets. The MiCA Regulation will also cover cases of market abuse in any type of transaction or service, including market manipulation and insider trading.

Reserve requirements for stablecoins

With regard to the stablecoins that made headlines in May with the failure of the algorithmic stablecoin TerraUSD, the MiCA regulation aims to protect consumers by requiring stablecoin issuers to build up a sufficient liquid reserve, with a ratio of 1: 1 and partly in the form of deposits. The rules for the operation of the reserves will thus provide for a sufficient minimum liquidity so that any stablecoin holder can be redeemed by the issuer at any time and free of charge. All stablecoins will be supervised by the European Banking Authority (EBA), with the issuer’s presence in the EU being a prerequisite for any issuance.

In addition, the development of tokens referring to one or more assets (asset-referenced tokens or ART) based on a non-European currency used as a means of payment will be restricted and the issuers of this type of token will have to have a headquarters within the EU.

Ecological footprint

Crypto asset market participants will be required to report information on their environmental and climate footprints. The European Securities and Markets Authority (ESMA) will develop draft regulatory technical standards on the content, methods and presentation of information related to the main adverse environmental and climate impacts. Within two years, the European Commission should issue a report on the environmental impact of crypto assets and the introduction of mandatory minimum sustainability standards regarding consensus mechanisms, including proof of work.

Reinforced controls

The European Banking Authority (EBA) will be responsible for maintaining a public register of non-compliant crypto asset service providers. Enhanced controls will also target service providers whose parent companies are located in countries on the EU’s list of third countries considered to be at high risk for anti-money laundering activities, as well as on the EU’s list of non-cooperative jurisdictions for tax purposes .

This provisional agreement is subject to the approval of the Council and the European Parliament before entering into the procedure.


Non-fungible tokens (NFTs), ie digital assets representing real objects, such as works of art, music and videos, will be excluded from the scope of the MiCA regulation unless they fall under the existing categories of crypto-assets. Within 18 months, the European Commission will be asked to prepare a full assessment and, if necessary, to assess the need to propose a specific regulatory regime for NFTs and to address the emerging risks of this new market to grab.

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