News View Non-AMP

European Banking Authority Proposes Strict Regulations for Stablecoin Issuers under MiCA

Published by
Qadir AK

The European Banking Authority (EBA), in alignment with the European Union’s Markets in Crypto Assets (MiCA) policy, has unveiled draft regulations concerning capital and liquidity requirements for stablecoin issuers. These pivotal regulations aim to monitor and govern stablecoin activities within the European Union.

Key Regulations Set Out by EBA

The MiCA framework restricts the circulation of stablecoins denominated in foreign currencies within the EU and enforces rigorous reserve requirements for stablecoin issuers. One of the main goals of this groundbreaking policy is to ensure the stability and integrity of the digital asset market.

Stakeholders in the crypto space are urged to prepare for the forthcoming implementation of MiCA regulations scheduled for December 2024.

EBA’s Third Batch of Policy Products under MiCA

The European Banking Authority released its third set of policy proposals under MiCA, including various crucial criteria:

  • Capital and liquidity requirements for stablecoin reserve assets.
  • Regular liquidity requirements for stablecoin issuers.

The EBA emphasizes the importance of recovery planning for issuers of ARTs (Asset-Referenced Tokens) and EMTs (E-Money Tokens). They must prepare in advance for adverse scenarios that could impact their ability to comply with regulatory requirements related to asset reserves.

Supervision of “Significant” Stablecoins

EBA’s recent publications indicate their intention to regulate stablecoin issuers with bank asset reserves further. According to EBA, stablecoins classified as “significant” will fall under their supervision and must maintain funds equivalent to 3% of their reserves instead of the standard 2%.

The consultation package also outlines conditions for designating ARTs and EMTs as “widely used” within a member state. These criteria are crucial for identifying the most relevant custodians of asset reserves, trading platforms, payment service providers, and crypto-assets service providers. These entities will play a significant role in the MiCA framework’s regulatory landscape.

Consultation Period and Public Hearing

EBA’s proposals are open for consultation until February 8, 2024, and a public hearing is scheduled for January 30. These steps aim to gather input and feedback from stakeholders before the regulations are finalized.

These regulations under MiCA reflect the European Union’s commitment to ensuring the stability and integrity of the cryptocurrency and stablecoin markets, with a strong focus on investor protection and financial stability.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Recent Posts

SHIB Team Rolls Out Major Shibarium Upgrade, Making SHIB Burns Faster and Easier

The Shiba Inu community has something new to cheer about. As the Shiba Inu team…

June 9, 2025

First Time Investing? Experts Recommend Ruvi AI (RUVI) Over Dogecoin (DOGE) for Smarter ROI in 2025

Starting your investment journey can feel overwhelming, especially in the fast-moving world of cryptocurrency. If…

June 9, 2025

XRP Coiling Up for a Big Move: Will it Reach $10 in the Upcoming Bullish Wave?

The XRP price remained consolidated within a tight range for over a couple of years,…

June 9, 2025

What’s The Best Crypto To Buy Beyond Dogecoin (DOGE) and Shiba Inu (SHIB)

Investors are scouring the crypto market for the best crypto to buy now, seeking tokens…

June 9, 2025

Why Gleec Transitioned From Secure Communications To Payments & Tokenized Art

For most blockchain developers these days, the focus of their efforts is no longer just…

June 9, 2025

New Crypto Coins Analysis: Bitcoin Solaris Mobile Mining App Allows Anyone to Mine from Their Phone, Unlike Bitcoin’s $15,000 Equipment

For years, Bitcoin mining has been a game for the wealthy. As ASIC machines skyrocketed…

June 9, 2025