The European Banking Authority (EBA) recently released comprehensive guidelines focusing on recovery plans for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs) under the Markets in Crypto-Assets (MiCA) regulation. This new framework is crucial for maintaining compliance with regulatory standards and ensuring the stability of the crypto-asset market in the EU.
The guidelines introduced by the EBA mandate that issuers develop thorough recovery plans that encompass several key elements. These recovery plans should include governance details, recovery options, and a communication strategy. Additionally, issuers are required to establish a framework of indicators to monitor their financial health and operational stability, with a specific focus on tracking the alignment between the token’s market price and the value of referenced assets.
One of the crucial aspects of these guidelines is the incorporation of the principle of proportionality. This ensures that the recovery plan requirements are tailored to the issuer’s size, complexity, and business model. By adopting this approach, the EBA aims to provide issuers with flexibility in designing practical and effective recovery plans that align with their unique circumstances.
Transparency is a key focus of the guidelines, with issuers being required to develop robust communication strategies to keep token holders and other stakeholders informed about the implementation of recovery options. This includes managing potential adverse market reactions and ensuring stakeholders are aware of the steps taken to restore compliance. The guidelines also emphasize transparent internal decision-making processes and timely communication with competent authorities.
The EBA developed these guidelines following a public consultation that ended in February 2024, incorporating feedback from various industry stakeholders. The final guidelines strike a balance between regulatory oversight and operational flexibility, ultimately aiming to strengthen the resilience of the crypto-asset market in the EU. Issuers must adhere to these guidelines and notify the EBA of their compliance status, with the guidelines set to take effect two months after publication on the EBA website.
The formalization of these guidelines by the EBA marks a significant step towards ensuring the stability and reliability of the rapidly growing crypto industry in the EU. By establishing robust recovery plans and fostering transparency and communication within the market, the guidelines play a crucial role in enhancing the resilience of the crypto-asset market and maintaining regulatory compliance. It is imperative for issuers to carefully follow these guidelines to uphold the integrity of the crypto-asset market in the EU.